Stephanie, 26, knew that her 850-square-foot, one-bedroom apartment in the trendy Saint-Henri neighbourhood in Montreal was a steal at $1,075 a month. At the time, a smaller basement bachelor pad on her street was going for $1,600.
By the spring of 2019, when Stephanie, whose last name has been omitted for privacy because she doesn’t want to jeopardize future rentals, decided to move in with her boyfriend, the place felt too small for the two of them. But because the rental market was heating up—Montreal’s rental vacancy rate is at a 15-year low—they were unable to afford a larger place at market value.
So she did a swap and transferred her lease and her apartment to someone else, in exchange for a two-bedroom apartment farther from the city centre, at $810 a month. The person she swapped with was willing to pay more for less room because of its coveted location.
Lease-swapping is gaining popularity in Montreal, where the law and the renting culture have created a phenomenon that acts as a kind of rent freeze for both tenants.
Swapping involves letting your landlord know about the plan, providing credit history to them, and filling out paperwork to reassign the rental agreements. Landlords have 15 days to oppose the deal—which can only be contested if they can prove that they have a good reason, such as concerns about a person’s credit worthiness.
According to Anna Kramer, an urban planning professor at McGill University, it’s a hassle for landlords to cancel a swap. “The impetus falls on the landlord to prove something, as opposed to the tenant, so that’s why this seems to be a successful strategy,” she said.
The rent-swapping phenomenon
Although Montreal doesn’t have universal rent control, there are guidelines limiting how much landlords can increase rent between tenants. These rules, though inconsistently enforced, are among the strongest protections against rent hikes in the country. In Ontario, for example, there is no limit on how much landlords can increase rent between tenants. Swaps are technically legal in Toronto, but it’s super difficult to get your landlord to agree to one.
Kramer said there’s a subculture of rent swapping in Montreal that doesn’t exist in other places.
That rent-swap craze can be seen in the proliferation of Kijiji ads (277 offering a swap in Montreal at the time of writing). The Facebook apartment swap group that Stephanie used has 2,700 members—500 who joined in February.
Apartment-hunting has become ‘a war zone’
“You can see battle lines forming as the rent gap gets bigger,” said Kramer. If rents continue to surge while demand climbs, she predicts increasing conflict between tenants and landlords.
There’s a particular type of rental that is a hot commodity: housing for families. According to the January Canada Mortgage and Housing Corporation (CMHC) report, units with three bedrooms or more have a rental vacancy rate of only 0.7 percent.
Sebastien Lepine and his two kids, aged 12 and 15, wanted to stay in the Plateau Mont Royal neighbourhood where they’ve lived for more than a decade, but they needed more space. Giving up their current lease and hunting for a new three-bedroom place meant long lineups and a huge hassle.
Instead Lepine found a swap match in two friends who were parting ways with a third roommate and looking to downsize. He figured he will save at least $600 a month with his swap by keeping his rent at $1,400 when the going rate for a comparable three-bedroom is $2,000 or more.
Montreal resident Aurelie, 33, and her girlfriend Marion, 25, have a verbal agreement to swap their 500-square foot transit-accessible bachelor pad for a two-bedroom apartment in May. Their last names are omitted for privacy because they haven’t approached their landlord about it yet. The swap means that their rent will go from $627 a month to $930, but they’re getting a place that is three times as big. She’s avoiding the “war zone” of competing with other prospective tenants at viewings “full of long lineups of people.”
If you can’t swap, sublet
Rental swaps are not a phenomenon in Toronto, mostly because landlords are not incentivized: unlike in Montreal, there's no limit on rent hikes for rental agreements with new tenants.
Subletting is widely-used instead. By law, landlords in Ontario can only increase rent for existing tenants once a year, up to a maximum of 2.2 percent. Subletting allows intermediary tenants to move into a place for part of the duration of a lease so that when the principal tenant returns, rent can’t be hiked as though it’s a new lease.
Toronto resident Halle Turner, 21, moved out of her parent’s home in the suburb of Brampton in 2018 to live close to her school and work. The fashion design student says she needs to be in the city because of the gigs that she works—she’s on-call for events and styling shoots. She says the two-bedroom apartment, with no living room or common space other than the kitchen, that she shares with a roommate for $1,977 monthly stretches her budget to the max.
Turner is looking for a subletter to let her keep her tenancy while she moves back to her parents’ house for the summer. She will still be responsible for paying rent when she’s not there but she can collect an equal or smaller amount from subtenants. Turner is also legally responsible for any damage to the unit.
“A lot of people are fighting to live in the city,” she said. “I wish that people didn’t have to live with roommates for the rest of their lives to be able to afford Toronto.”
Left out of swaps
Even in Montreal, rent swaps are only available to those who already have a cheap apartment and an established credit history. Newcomers, young workers, and the most vulnerable renters are excluded.
Montreal is known for its large renting population (45 percent of households rent), but that pool is getting bigger as home prices have climbed, increasing by more than 5 percent for three years in a row.
“Montreal used to be a renters’ paradise with a lot of cheap places available,” said Kramer. “But now, there’s increased income inequality: a growing highly-paid tech sector so that people can outbid others.” She predicts swaps will become more common and will be a big source of friction.
Youssef Benzouine is a community organizer for Front d’Action Populaire en Reamenagement Urbain (FRAPRU), a tenant advocacy group. FRAPRU has seen a “dramatic increase” in requests for affordable housing since 2018, he said, which is a symptom of the rental crisis.
“We receive so many calls, almost every day, from tenants who don’t find housing because it’s too expensive or they are being discriminated against because they have a kid or they don’t have the right skin colour and the person refuses to rent to them,” he said.
For people like Stephanie though, swaps are their best strategy. She’s staying put for now but in early February, she gauged interest in the swap market for her current place by posting an ad on Kijiji.
“I had to remove my phone and my email within 30 minutes because my phone was getting so blasted,” she said. Within three hours of posting, she said she received about 400 responses including people offering to pay as much as $2,000 extra to be able to swap for her place.
“The demand is pretty crazy,” she said. “If I ever move again, I would totally do a swap because I know I have a great, cheap apartment.”
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