Rental market needs an Rx ASAP
Sabrina Maddeaux says it isn't just the housing market that has hit a crisis level in Toronto -- try renting. POSTMEDIA
SABRINA MADDEAUX/ 24 HOURS
There's been a lot of attention paid to home sales lately in Toronto and rightly so. The market was spiralling out of control and - even with some recent price corrections - is still largely out of reach for most young Torontonians.
However, in the media and political rush to address the woes of homeowners and potential homeowners (traditionally a demographic heavily catered to by politicians), we've almost completely overlooked the perils of the city's rental market. The out-of-control state of rentals in Toronto disproportionately affects millennials, who endlessly seem to get the short end of the economic stick while being simultaneously chided for buying avocado toast instead of houses.
Avocado toast isn't contributing to Gen Y's inability to afford homes, but an excruciatingly overpriced and underserved rental market is. New rent control legislation has only pushed landlords - fearful of losing future dollars - into posting higher initial rental rates. The lack of affordable homes has kept more and more city dwellers in the rental market, making quality spaces spark bidding wars when units are available. Submitting résumés, paying four to six months'rent upfront and agreeing to legally questionable lease terms are increasingly common.
It's no secret that the rental market is populated by landlords who are speculators and even foreign-owned corporations. The renter-landlord relationship is no longer an individual one with room for empathy, but a corporatized behemoth who endlessly craves more money. Reports say rental prices in Toronto now rival London and Brooklyn, but there's a big difference between making rent in these cities versus Canada. Middle-class salaries are often significantly higher in London and NYC, having adjusted years ago to high-demand rental markets.
Toronto, whose market boomed only after the latest recession, has never seen the salary increase. The U.S. dollar and UK pound both go further when it comes to many purchases, leaving them with more purchasing power even when making similar salaries. Young Toronto renters end up paying so much of their paycheque in rent, the thought of saving for a down payment is laughable. Home prices would have to crash significantly to make ownership possible for those stuck in the city's revolving door of increasingly expensive rentals.
City planners - Jennifer Keesmaat included - want young people to give up on the idea of owning a detached home. But what sort of city do we live in where young people are having to give up the idea of renting an apartment? Many millennials are struggling to simply make next month's rent - or find a place to live at all. As Gen Y increasingly enters their 30s and plans on having families, this problem is only going to be exacerbated. Families may not need detached homes, but they do need roofs over their heads, a reasonable amount of space to thrive and leftover funds for things like child care, family outings, sports team fees and school supplies.
Let's not even get started on what rental prices are doing to a generation's retirement savings. We've repeatedly witnessed the government fail to focus on one element of city planning, let alone multitask to address multiple facets of an issue. However, if Toronto is going to maintain its reputation as a livable city, it's not enough to just address house prices. We need to perform triage on the flailing rental market before it's too late.
Want to read more from Sabrina? Follow her on Twitter @SabrinaMaddeaux