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How Toronto's rental market is squeezing Millennials

Houses are out of reach, rents are soaring, and for those in buildings built after 1991 there's no limit on how high they can go.

Ranziba Nehrin is working full time in her field, but she’s worried about being able to afford her apartment if the rent goes up even slightly.

Eduardo Lima / Metro Order this photo

Ranziba Nehrin is working full time in her field, but she’s worried about being able to afford her apartment if the rent goes up even slightly.

Ranziba Nehrin considers herself lucky.

She shares a two-bedroom, 650-square-foot apartment with one roommate in Toronto’s West Queen West neighbourhood. And, at about $925 a month each, it’s “an absolute steal” given the current market.

Still, Nehrin is spending about 40 per cent of her paycheque on rent, and once she puts as much as she can towards the $13,000 she owes in student loans, there isn’t much left over — especially not enough to save for a down payment on a home.

“The feeling that I have is that I can’t make a mistake right now,” the 24-year-old said. “I can’t live life with any sort of margin of error.”

It now takes the typical young Torontonian between the ages  of 25 and 34 almost 4 ½ months of full-time work to pay for a year’s rent in an average three-bedroom apartment, according to data University of British Columbia professor Paul Kershaw provided exclusively to Metro.

That’s a full month more of work, just to make rent, than it took back in 2003, he added.

Kershaw, founder of Generation Squeeze, which advocates for young people on housing and other issues, said there’s a direct connection between soaring home prices and rising rents.

The vacancy rate in Toronto is 1.3 per cent, considered very low, and average rent is $1,233, up 3.1 per cent from 2015, according to the Canadian Mortgage and Housing Corporation.  

With fewer people able to buy into the housing market, there’s increased competition for rentals.

“And we haven’t been building purpose-built-rental in our big cities at a pace that can keep up with that demand,” Kershaw said.

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Kershaw says it’s time to “level the playing field between renters and owners.”

Changing the Ontario policy that exempts landlords from capping rent increases on buildings built after 1991, like Nehrin’s, is one quick win that “requires urgent attention,” he said.

There’s already been a push to close the loophole in Toronto.

Councillors Ana Bailão and Josh Matlow are calling on the province to review the Residential Tenancies Act with a specific eye toward rent control.

The exemption creates a “two-tiered system of renters” said Geordie Dent, executive director of the Federation of Metro Tenants' Associations, which has long called for it to be removed.

“The biggest issue isn’t just thousand dollar rent increases, which you’re seeing some people get,” he said. “A bigger concern is actually what we call economic evictions.”

Some tenants in buildings built after 1991 are afraid to ask for repairs or may even fork over illegal security deposits because they’re scared showing resistance will lead to a rent increase. Dent said.

It’s something that’s on Nehrin’s mind, even though she’s had a good relationship with her landlord.

She’s heard stories about other people in her building who’ve seen their rent increase, and she's nervous about what will happen once her lease is up.

“Rent controls aren’t a thing so I don’t know what my life is going to look like in September,” she said. “They can raise it and you just kind of have to grin and bear it; cry and bear it.”

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So what now?

Kershaw advocates for policy changes relating to taxes.

Tax subsidies for renters would allow them to build capital even if they don’t own a home. He also recommends a “portable housing benefit” that would allow people younger than 40 to credit a portion of their rent or mortgage interest against taxes owed.

As for balancing supply and demand, using tax dollars to give developers an incentive to build more apartments specifically for renting — as opposed to just condos — could go a long way, said Kershaw, who has launched a GTA chapter of Generation Squeeze in a bid to push for movement on issues like housing.

Overall, governments need to adopt policies that give tenants more security so that they can keep their kids in the same school or daycare for years at a time.

“There is a need to challenge attitudes that treat renters as less desirable community members,” Kershaw said.

Dent, meanwhile, would like to see standardized leases, and automatic penalties for landlords who don’t follow tenant law.

“They’re using the advantage that they have right now to essentially ignore the law,” he said, calling the market “a golden age for landlords.”

About this series

Metro is exploring possible solutions to the growing problem of housing affordability in the GTA. Over the next few Mondays we'll look more at pros and cons of different policy changes, what other places have done, and continue reporting on people's personal stories.

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