Rental costs climb in the suburbs as more affordable housing needed, experts say

Rental prices outside of the Greater Toronto Area are climbing closer to Toronto’s and that’s because more people are looking to rent instead of buy, a new study found.

Mississauga, Vaughan seeing rise in rental prices due to increased demand, new report finds

More people are renting in the suburbs of Toronto, which is driving up prices due to a lack of affordable housing options, a study by the Canadian Rental Housing Index found. (Joe Fiorino/CBC)

Rental prices outside in the Greater Toronto Area and beyond are climbing closer to Toronto's and that's because more people are looking to rent instead of buy, real estate experts say. 

A new study by the Canadian Rental Housing Index (CRHI) examined census data to find that between 2011 and 2016 around 753,000 new households were created — of those, more than half were renters.

"With escalating prices keeping many Canadians from affording home ownership … more people are entering the rental market or staying in the rental market longer," said Jeff Morrison, executive director of the Canadian Housing and Renewal Association.

The problem of pricey real estate and rental units is well-known in Toronto and that's why Jonathan Lau moved to Mississauga.

This Toronto native, Jonathan Lau, was driven out of the city four years ago due to rising rental prices. (Joe Fiorino/CBC)

"I lived in Toronto my whole life. It wasn't until Toronto started increasing its prices where I had to move out to this part just to pay rent," Lau told CBC Toronto. 

He says what he pays for his rental unit is decent, since he moved into the city's Burnhamthorpe area four years ago. But now one-bedrooms are going for the same price as his two-bedroom apartment.

"They're about $1,500," said Lau, adding that's closer to what it would cost to rent a one-bedroom apartment in Toronto.  

The CRHI report says another reason for the rent increases in places such as Mississauga and Vaughan is there's fewer rental units available.

Margie Carlson is the deputy executive director of the Ontario Non-Profit Housing Association. (Joe Fiorino/CBC)

Margie Carlson, the deputy executive director of the Ontario Non-Profit Housing Association, blames that on prioritizing sprawling detached-home developments over mid-rise affordable rental units.

"The government left it up to the private market to make decisions," said Carlson. "We've seen single detached homes put up in our suburbs. What we really need there is more density."

What Carlson finds really alarming is that high prices and low availability are forcing people to pay more than they can afford.

The CRHI data shows that nearly one in five renter households are spending more than 50 per cent of their income on rent. To live comfortably, Carlson says, that number should be closer to 30 per cent.

"What happens when people can't afford their rent, they may miss a payment ... they also may need to access food banks because they can't afford to pay for the other things," said Carlson.

The Ontario government introduced the fair housing plan last year, which includes creating more affordable and family-sized rental housing. But Carlson says it will be a while before the effects of that are seen and the pressures ease in the GTA.