Toronto

A year of living precariously: Toronto's rental struggles define 2017

Real estate watchers blamed this year's skyrocketing rent on a perfect storm: would-be first-time home buyers unable to break into the ownership market, forcing them to rent longer and leading to record-low vacancy and rising rent. Here's a look back on our coverage, plus a look ahead at 2018.

A look back at CBC Toronto's year-long coverage of Toronto tenancy turmoil — and what lies ahead

As 2017 wraps up, a look back at Toronto's rental changes and a look at the year ahead.

Two years ago, Toronto artist Steven Twigg discovered a novel way to rake in the rent instead of paying it himself.

The 26-year-old illustrator rebranded himself as a professional house sitter to try to lower his overhead, bringing in about $900 a month by moving around the city, looking after dogs and watering plants in various locations around town.

But the transient lifestyle has left Twigg living mostly out of a backpack, and in the 10 months since CBC Toronto first spoke with Twigg, he's fostered thoughts of settling down.

While hopping around the city has been fun, Twigg said, he'll eventually want a place of his own — and if rent continues to climb, like other struggling tenants, he'll have to consider moving away.

Steven says he's found a way to turn the tables on Toronto's crazy rental market, but like others in the city, eventually wants to settle down without handing entire paycheques over to his landlord. (Grant Linton / CBC Toronto)

Twigg was one of dozens of renters CBC Toronto featured this past spring, as part of our series, No Fixed Address.

From young professionals, to students, and folks living on disability, a number of people expressed their frustration at barely keeping up with sky-high rent, or finding themselves in bidding wars over dingy basement apartments.

While some argued it was simply the cost of living in Canada's biggest city, a number of real estate watchers blamed a perfect storm: would-be first-time home buyers unable to break into the ownership market, forcing them to rent longer and leading to record low vacancy and rising rent.

Another major part of the problem: not enough purpose-built rental construction to meet the pent-up demand.

The province of Ontario announced sweeping changes in April, expanding rent control in hopes of protecting tenants from unlimited rent increases. The so-called Fair Housing Plan also included new incentives for developers to build dedicated rentals, especially for the middle- and lower-income market.

What does renting look like in 2018? Not great

Half a year later, on the cusp of 2018, it seems not much has changed in Toronto's rental market. In fact, some say it's worse.

"The market has become even more challenging since the new rules came in," said Shaun Hildebrand, senior vice president for Urbanation, a real estate consulting firm.

"Ironically it's become even more difficult to find a rental property."

Vacancy rates remain historically low, he says. Traditional rentals have an average vacancy rate of one percent, while condo apartments are even less.

Plus, rents continue to rise. According to Urbanation's data, 10.3 per cent year over year. The average condo apartment rents for about $2,219 per month.

Hildebrand says it's not all bad.

Several higher-end rental properties will finish construction in the new year. A number of condo buildings will also enter the market, which for the past decade, has supplied much of the GTA's rental inventory.

Urbannation's Shaun Hildebrand says without enough supply to meet demand, rent will likely continue to increase in the coming year. (Urbannation Inc.)

But Hildebrand points out condo investors may be tempted to sell, rather than rent out their units. Not only has the condo market remained red hot, the new rent controls may be too big of a turn off, he says.

Either way, renters can expect the competition to remain fierce.

"We have a very substantial amount of pent up demand that is looking for new rental properties. So when these units come up for rent, they will be leased out very quickly at an increasingly higher rates of rent," Hildebrand predicted.

Beefing up rental supply

While tenants may not be seeing double digit increases to their rent, thanks to the new rent control, the most pressing issue now is supply, according to Toronto's Deputy Mayor, Ana Bailao.

"It's definitely a balancing act," said Bailao, who is also the chair of the city's affordable housing committee.

"The province did bring in rent control but they are speaking with the industry on a regular basis to tackle the supply issue, and we are as well."

Coun. Ana Bailao wants a more inclusive rental market that doesn't push lower-income renters out of the city. (CBC News)

In October, Toronto city council approved nearly $28-million worth of incentives to build 600 affordable housing units on land provided by Queen's Park. But while the vote may be good news for low- and moderate-income people struggling to find a place to stay, it's unclear when the apartments will be ready. The city has approved other projects in recent years but few have opened.

"We want to have people that want to live here, that have lived here, to be able to continue to live here," she said.

"For me, it's one of the most important issues we need to continue to tackle."

And if it gets any worse...

Steven Twigg, the enterprising house-minder, agrees with Bailao and wants to stay within city limits. "Twelve hundred would be nice," he said, citing a monthly rent payment, an amount that would allow Twigg to treat himself once in a while.

But when it hits $2000, "then it's like, well, this is what I live for. To pay for rent."

Twigg thinks rent control changes made earlier this year might prevent rents from leaping out of his price range, but for now, he's pessimistic. "I don't know if it's going to bring it down to a manageable level. I think we need more housing for that."

Twigg says he'd rather stay in the city, but thinks it wouldn't be wise to blow the money he's saved on a rental. (Steven Twigg)

And given his belief that "there's always a loophole" when it comes to rental regulations, he doesn't expect a sudden freeze on prices.

"I'm thinking of moving elsewhere for the most part," he sighed, noting that he's been saving money for a cabin up north or a cheap place in the tropics, lest affordable housing become so scarce in Toronto he simply can't live here.

The possibility strikes Twigg as less than ideal. "I'd rather stay in Toronto because of the city that it is," he said. "All my friends are here."

now