By Nina Kalirai
It’s no secret the housing market in Canada’s major cities are becoming more and more unaffordable. The reality of the property rental market in Ontario is often overlooked compared to that of the home owners market.
In the interview with VIBE TALKS Correspondent Nina Kalirai, we discuss with Jim Murphy, President and CEO of the Federation of the Rental-housing Providers of Ontario (FRPO) the housing market situation in Ontario.
We also discuss the purpose of the Federation of Rental Housing Providers of Ontario, how they are working with the government to provide more affordable and how much an individual needs to make annually in order to afford a rental in Toronto.
Nina: What is the main purpose of the Federation of Rental Housing Providers of Ontario?
Jim: The Federation of Rental Housing Providers of Ontario, or FRHPO as we call ourselves, represents property managers, property owners and suppliers of rental housing in Ontario. We represent about 350 000 units, both residential and apartment units across the province. The association talks to the importance of rental housing, the need for more rental housing supply, and what needs to be done to get that.
Nina: What is the average cost of renting a basement versus a four-bedroom home in Toronto today?
Jim: I don’t have specific numbers on that. It varies in terms of location, in terms of when the property was built and the amenities that it has. What I do know for sure is that, generally speaking, when you rent a condominium it’s usually 40%-50% higher, if not more, than a regular apartment building. If you rent a one or two bedroom condominium you’re going to be paying at least 50% more than the average price of a purpose built rental, if not a little higher.
Nina: In terms of living conditions, what can renters usually expect from average costing basements or four bedroom homes?
Jim: Again, it depends on where in the city and at what price point you’re paying. Obviously, if you’re just renting a basement apartment or a bedroom of an existing residential unit, it’s going to be much different than having the whole unit to yourself in terms of a home. Hopefully you’ll have separate access, and those sorts of things. You’ll also have a direct relationship with somebody who actually probably lives in that unit, if it is a basement apartment. If you’re renting a condominium on your own, or a family home on your own, you’re going to have a landlord that’s not there. You have the whole unit to yourself, obviously in terms of using it, and won’t necessarily have to share it with anybody.
Nina: How much would an individual have to make annually in order to afford an apartment rental in downtown Toronto?
Jim: It depends on the type of rental unit, how many bedrooms you want, the location that you want, the rental property, those sorts of things. Usually 30% of your gross income should go towards housing, which includes renting. The average rent in the city is, depending upon the unit price, anywhere from $1200 to $2000.
Nina: In terms of a two bedroom condo downtown, by Union Station, or something like that. What would an average estimate be?
Jim: It depends on the unit type, the amenities that are in that building, location, if it’s next to a subway or to GO transit. All of those go into the price of what people will pay. Generally speaking, for a two bedroom unit you’re looking at around $2000, maybe a little above.
Nina: What is the annual trend in terms of the cost of rentals in Toronto?
Jim: Rentals in Toronto are governed by rent control. If you’re in a purpose built rental unit, or even a condominium, your increase is governed by what’s called an annual guideline increase. For 2017, that was 1.5%, for 2018 it’s 1.8%. It’s set out in legislation and covers whatever the consumer price index is for Ontario, the year before.
Nina: In terms of price differences for renting an apartment downtown Toronto versus an apartment in Hamilton, again I know you said it depends on the amenities and what not, but would you say there’s a big gap in terms of price difference between those two cities?
Jim: Hamilton has been a very positive story in real estate in general. Not only in terms of rental but in terms of ownership. People are discovering Hamilton, especially if you work in the west end of the city, in Peel region or Halton or even in Etobicoke. Hamilton is becoming a real alternative. It is more cost conscious in terms of its prices. The average rents are lower than they are in Toronto, or in Etobicoke for that matter. Hamilton’s being seen in a more positive light, in both rental and home ownership, which is a positive sign. Hamilton is certainly growing as an alternative if you’re working in the west end of the GTA.
Nina: Where would you say most people who find it difficult to afford a rental in the city of Toronto end up moving to?
Jim: That’s a hard question because they may look to a different type of housing. They may want to go to a co-op or a social housing list, because they want to live in the city. They may look for a basement apartment or something else in the city, depending on where they are in their lives. It depends on your job and the sort of lifestyle you want. Do you want to be close to all the amenities of the city or not? I think as you get older your more open to moving a little further afield. I think younger people, the millennials, certainly want to be in the vibe of the city.
Nina: How is the federation of rental housing providers of Ontario working with the government to provide more affordable rentals in Ontario?
Jim: That’s a really good question. It is really the most important issue right now. We have record low vacancy rates in the Toronto area. We’re now at 1%, and for condominiums that are rented it’s at 0.7% which is essentially full occupancy. We’ve been saying to the governments, primarily provincially, that we need to deal with supply. We need to have rental housing. Ontario treats new and current rental housing the same. Most jurisdictions, including Quebec and British Columbia, treat it differently. We’ve said for getting more purpose-built rentals, which we need, they should be treated differently in terms of what the guideline is. They should also be treated differently in terms of an exemption from rental control for a certain period of time, in order to get that new production. We need about a vacancy rate of 3% to make the system work, and we’re at 1% or below. We also need municipalities to come to the table. Municipalities have development charges, building permit fees, a lot of things that act against new purpose-built rentals and supply for tenants. We need them to really change that in order to get more rental supply.
"We’re now at 1%, and for condominiums that are rented it’s at 0.7% which is essentially full occupancy."
Nina: Where can renters go for more information about the Federation of Rental Housing Providers of Ontario?
Jim: A couple places. One, we obviously have our website. We’ve also started a whole public relations campaign on rental housing, and the need for more rental housing supply for tenants, and the hashtag is #renton. The website for that can be found here. It’s the place to go for more information and to support more supply. There are also other places. If you go to the ministry of housing website, that’ll have information, in addition to our own.