One out of every five Ontarian renters spend 50 per cent of their income on housing, according to a study on affordable housing in the province released Monday.

The report, commissioned by the Ontario Non-Profit Housing Association and the Co-operative Housing Federation of Canada, said 20 per cent of the approximately 1.3 million Ontarians who rent spend far too much on keeping a roof over their heads.

"While there is some debate about using 30% of a household's gross income as the threshold to measure affordability, there is little debate about affordability when tenant household spend 50% or more of their income on housing costs," the study said.

The percentage of Ontarians who spent half of their income on rental accommodation has remained constant in the past couple of years.

That is a bad sign, the groups said, when you consider that Canada has enjoyed a strong economy during the same period.

As the recession takes hold, Ontario's lower-income renters will have more problems affording accommodations, the study said.

Dropping vacancy rates

One factor boosting rental costs is the province's falling vacancy rate.

Across Ontario, the percentage of apartments that sat empty stood at 4.1 per cent in 2004. By 2008, the provincial vacancy rate had fallen to 2.7 per cent.

A lower vacancy rate tends to drive up rents as landlords can charge more for a smaller number of units.

Toronto's apartment vacancy rate slipped to two per cent last year versus 4.3 per cent in 2004.

Kingston, the home of Queen's University, took the prize for tightest rental market with a vacancy rate of 1.3 per cent, edging the Ottawa region by one-tenth of a percentage point.

On the flip side, Windsor saw its vacancy rate almost double in the same time period, hitting an eye-popping 14.6 per cent in 2008, up from an already impressive 88 per cent four years earlier.

Windsor has been particularly hard-hit as the province's auto industry has been shedding jobs in the past year or so.

No building

The other factor cited in the report for the tight rental market was the lack of rental construction as well as the trend toward changing rental housing into condominiums aimed at wealthier buyers.

In 2007, for instance, Ontario builders started less than 3,000 new rental units, fewer than five per cent of the number of housing starts in the same year.

With the bottom falling out of the North American housing sector in 2008, it is unlikely that Ontario builders increased the number of rental starts in 2008.

The groups sponsoring the study are advocates of social housing and said that Ontario needs 9,000 new affordable rental units annually between 2009 and 2013.