Be warned, our response to this hot-button issue is not for the faint of heart — especially if you were born anywhere between the early 1980’s and the mid-1990’s to early 2000’s.
While Torontonians should be thankful that rent in the city is considered affordable compared to other global financial hubs — we’re ranked the 13th most powerful money market, but the 26th most expensive rent — to misinterpret that statistic as suggesting Toronto’s rental market is a remotely easy one to be a part of, well… That would be a mistake.
Yes, relative affordability is a good thing. As of just a few months ago, New York City’s average price for a one-bedroom apartment was $4,900 CDN per month, whereas the Toronto Real Estate Board (TREB) estimated the average monthly rent for a one-bedroom condo at $1,861.
Not cheap, by any means. But clearly not as bad as it could be — especially in a housing landscape largely seen as spiralling out of control.
However, make no mistake about it, Toronto’s current rental market is still tough as nails for potential tenants.
For one, it’s as overpriced as it is underserved, with the millennial generation — already afflicted by an inability to afford buying a home — certainly getting the short end of the stick.
In fact, this very shortage of affordable homes is what’s kept a swelling number of city dwellers in the rental market, in the first place. And as a result, bidding wars for top-shelf units have become commonplace, as have the requirement to fork over anywhere from four to six months’ rent upfront, as well as submit to legally questionable lease terms.
To that end, Toronto’s rental market is dominated by landlords who are either spectators or foreign-owned corporations. Consequently, the tenant-landlord relationship has ceased existing as an individual one (where the ability to understand and share the feelings of one another counts for something), and devolved into more of a corporatized connection (where the lessor continues to demand more and more money).
And while new rent control legislation has been introduced, some argue it’s only challenged landlords into charging higher initial rates as a solution for potentially losing future dollars.
Furthermore, while rent prices in Toronto may lag a bit behind Brooklyn and London, there’s no disputing the tremendous difference between making rent in those cities — where middle-class salaries are often significantly higher, having adjusted years ago to high-demand rental markets — when compared to Canada. Toronto, simply put, has never seen the same kind of salary increases.
What does this all mean?
Well, not only are young Toronto renters doling out the majority of their income to pay rent — thus making the idea of saving for a down payment a pipe dream — but the longer these millennial tenants find themselves trapped in the city’s increasingly expensive rental market, the more this entire generation’s opportunity at building future retirement savings are being stifled.
Hey, we warned you this was going to be grim.
So how do we fix this?
Sorry to say, but if there was a simple solution, we wouldn’t be having this discussion right now.
Naysayers would tell young people to abandon the idea of owning a detached home. We don’t agree with that though.
No, instead what this might require is more sophisticated city planning. More rental housing, for one. Because if Toronto is not building enough, then the prices have no recourse keep climbing. And, of course, a better commitment from our government to regulating rental prices would only reap positive benefits.
While the above steps might not entirely fix the problem, we’re confident they’d at least make it much easier to rent around here — something vital to Toronto retaining its reputation as one of the most livable cities in the world.