Toronto tenants in for higher rents and smaller apartments

According to a new report from TD, the situation for renters in Toronto isn’t going to get better anytime soon.

As part of a report on GTA housing, TD Economics shed some light on the growing problems for renters in the GTA, and offered a few suggestions on how to patch things up.

One of the major problems the report mentions is that lower-income tenants spend an average of almost half of their household income on rent.

“We have estimated that the housing gap (the difference between the rent they pay and the rent they can afford) for the bottom 40 per cent is on average $4,100 a year and rising,” the report said. “A housing benefit that would work to close much of the gap between income and rent levels would cost roughly $1 billion for the GTA alone.”

It would take a different kind of pricey patch to fix what TD identifies as a problem in renting regulations. In Ontario, apartments built before 1991 are subject to rent control regulations that ties rises to inflation, but according to TD,  owner costs like utility fees and property taxes have been rising faster. They suggest easing up on rent regulations to let landlords charge higher rents, but Geordie Dent, executive director of the Federation of Metro Tenants’ Associations, doesn’t believe that’ll fix anything.

“I’ve heard of no actual evidence that housing costs for landlords have gone up, and I can’t actually imagine what those would be,” says Dent. “Property taxes in the city of Toronto have been shifting downwards over the last 10 years.”

“Property taxes in multi-residential units are 3.2 times higher than they are for single family dwelling units,” Dent says. “But they’ve been going down. They’ve been that way for 50 years, that’s not a new development.”

With condos being built all over the city, those units are often all that’s left on the market for renters, but they don’t come cheap and are often quite small.

“The only real new housing that’s being built is condo stock, and that’s getting smaller and smaller,” says Dent. “That’s going to be an issue as population growth continues in the city.”

However, one of the biggest issues that both TD and Dent agree on is vacancy rates. Fewer people are moving out of their rented apartments, which means there are fewer apartments to go around for people moving in.

Vacancy rates in the GTA are at rock bottom according to the Canadian Housing and Mortgage Association, with a rate of 1.6% for purpose-built rental units.

“I moved into my building in 2009, and we were the only people who saw it that day. The landlord gave us the place,” says Dent. “Six months ago, a basement unit opened up and there was a line around the block. That’s five years, and that’s the situation renters are facing today.”