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Half of all renters in Toronto spend more on housing than they can afford

47 percent of Toronto households spend more than 30 percent of their income on rent
Canadian Press

Almost half of all renters in Toronto spend more than 30 percent of their income on rent, according to new numbers from the 2018 Canadian Rental Housing Index, a database compiled by the B.C. Non-Profit Housing Association, a housing advocacy agency.

For precisely 47 percent of Torontonians who do not own a home, more than a third of their income goes to rent, a number that the Canada Mortgage and Housing Corporation puts in the category of “unaffordable”. The CMHC essentially defines a household spending more than 30 percent of its income on rent as one that faces “affordability challenges”.


If that is the case, then a whopping 40 percent of Canadian renters overall face housing affordability issues, according to the Rental Index, which draws from housing supply, income and affordability data in the 2016 census.

In Ontario alone, 46 percent of renters spend more than 30 percent of their income on rent, while 21 percent spend more than 50 percent of their income on rent.

Close to 50 percent of renters in the densely populated regions surrounding Toronto that make up the Greater Toronto Area — Oakville, Mississauga and Brampton — also struggle with housing affordability issues, spending more than a third of their earned income on rent.

Toronto rents have skyrocketed in the last few years, as soaring real estate prices have pushed an increasing number of people into the rental market. Between 2011 and 2016, 146,000 households were created in Toronto — 85,000 of those, or 58 percent, were renter households, indicating a rising demand for renting over buying.

“The dominance of rental is a big change from the preceding two decades when home ownership rates rose significantly in Toronto,” wrote Greg Sutton and Scott Leon of the Wellesley Institute, in a report published last October. “Between 2006 and 2011, the rental sector grew by just 60,000 households while the homeowner sector grew by 140,000.”

But this trend of rising demand for rental homes over home ownership seems to be a nationwide phenomenon, according to figures from the 2018 Canadian Housing Index. Out of almost 753,000 new households created in Canada, 396,000 were rentals, accounting for 32 percent of the country’s homes.


In fact, as reported by the Globe and Mail, for the first time since 1971, home ownership rates have fallen — from 68.9 percent to 67.8 percent — a small but symbolically significant drop.

Living in two of Canada’s major cities — Toronto and Vancouver — is virtually impossible for those in the lower income bracket. Rental Index data shows that the lowest income households in Toronto, that is, those who make less than $22,881 annually spend 88 percent of their income on rent. In Vancouver proper (excluding the surrounding municipalities of Surrey, Burnaby, Richmond, West Vancouver and North Vancouver), that number was 91 percent.

This is unsurprising given rental costs in both those cities. In 2017, the average rent for condominiums in Toronto was an absurd $2,401, soaring 50 percent in five years, according to the city’s Tenant Issues Committee. For purpose-built units, average rent was $1,426, a 20 percent increase from 2012. Vancouver rents are even higher — the average rent for a two-bedroom apartment in downtown Vancouver hovers around the $3,000 mark, while one-bedroom units go for approximately $1,900.

The only province that seems to be an outlier when it comes to rents and rental market growth is Quebec, according to the Rental Index. Rents in Quebec are some of the lowest in the country (under $1,000 for a two-bedroom) and on average, Quebecers spend just 21 percent of their household income on rent — indicating that the province is still a largely affordable place for Canadians regardless of income.

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