CBC News: Pandemic pushing GTA rents to lowest levels in years, but lower-income tenants still struggling
Posted June 23, 2021
Posted June 23, 2021
When Kiri Vadivelu’s landlord tried to evict him after he lost his job at the start of the pandemic, the Scarborough resident fought to stay.
Vadivelu and his family have been living in their apartment since 2012 and simply couldn’t afford to move. So, despite a malfunctioning heating system and pile of ignored maintenance requests, he did his best to hang on.
“We have to pay [rent], otherwise we will be evicted and we can’t do anything about it,” Vadivelu said. He added the situation has only gotten worse for people like him who can’t afford to take advantage of falling rents seen through the pandemic.
“Tenants are neglected, neglected from every corner.”
Rents in the city of Toronto are at some of the lowest levels they’ve been in years, but affordable housing advocates say they haven’t dropped enough to have an impact lower-income tenants. They say lower prices and rental incentives may only help high-income earners looking for higher-priced condo rentals.
As a result, Monique Gordon, president of the Bergamot Tenant Association, says living in the city is becoming increasingly unaffordable.
“When somebody leaves our building, that’s when rent goes up by about $800,” said Gordon, who is also a member of anti-poverty organization ACORN Canada’s Etobicoke chapter. “The only difference I see [is] they have to leave and find something that’s more affordable.”
The median price for a one-bedroom apartment in Toronto is $1,800, according to PadMapper.
Data from the Toronto Regional Real Estate Board (TREB) shows an overall 16.8-per-cent drop in rental prices: before the pandemic, one-bedroom apartments rented for an average of $2,187. Two-bedroom units now go for $2,447 per month on average, compared to $2,812 a year ago.
But the drop not only hasn’t been enough to help low-income tenants. it also hasn’t made rentals any more accessible to middle-income earners, according to Douglas Kwan, director of advocacy and legal services at the Advocacy Centre for Tenants Ontario.
“Approximately half of renters are earning less than $40,000 a year,” Kwan said.
“In a city such as Toronto, where the cost of food, transportation, shelter is so high … we’re talking thousands and thousands of households who are barely making it.”
Oversupply of high-end condos
The rising supply of condos for rent is coming from two sources, says Murtaza Haider, a data science and real estate management professor at Ryerson University. The first is fewer people wanting to live downtown, with a significant proportion working from home and some moving out of the core. The second is short-term rental units that were converted to long-term because of new rules regulating Airbnb apartments.
The problem, Haider says, is being compounded by the addition of thousands of condo units completed during the pandemic. Sixty to 70 per cent of the 22,000 new units became rentals, according to Pauline Lierman, the market research director for condo sales and research group Urbanation.
“We’ve definitely seen the rental market have probably its biggest crisis in the last several decades,” said Lierman.
Supply soars, demand drops
While supply rose, demand plummeted. A year into the pandemic, Urbanation calculated an 18-per-cent drop year-over-year in Toronto proper, and a 16-per-cent decrease across the GTA.
Vacancy rates tell the same story: for the first quarter of 2021, they increased to 8.8 per cent in the city, and 6.6 per cent for the GTA. Before the pandemic, vacancy in the GTA was at 1.1 per cent.
Lierman says the market is flattening and showing signs of recovery as demand slowly grows. “We would probably expect that this trend continues to actually see the market fully recover by early next year,” she said.
Lisa Patel, a Royal Lepage realtor and president of the TREB, says price point is key, more so than before the pandemic.
“A lot of it is price-sensitive,” said Patel. “What I’m seeing are lower-priced rentals getting a lot more traction and interest.”
She says several units near York Street and Lake Shore Boulevard sat unoccupied for months until the prices dropped by several hundred dollars and landlords started including incentives like two months’ free rent, parking or gift cards.
But that’s cold comfort for low- and middle-income renters, like Vadivelu and Gordon.
“It’s just a creative way to market it and bring more and more rental income,” said Vadivelu.
“Real tenants, they’re not seeing any rent reduction.”
Article by Jessica Ng for CBC News