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New Ontario rental housing statistics and their meaning
Average Rents and Vacancy rates

by the Ontario Tenant Toronto Tenants web site

Released, December 2, 2003

The press release on this, distributed at 1:00 p.m., Tues., Dec. 2, 2003


Today, Canada Mortgage and Housing Corporation, (CMHC,) released its annual rental market survey,1 showing the claimed changes in average rents and vacancy rates over the past year, as provided by landlords. These statistics, when compared over 10 years, show a damning picture of the lack of real controls over rents under Ontario's rent regulations.

When reporting on these statistics, one must look at the long-term trend. This long-term trend shows what is really happening to families.

The reported figures from CMHC do not fully reflect the impacts on people, as there are no separate average rents provided for the vacant units and for occupied units, though we can only hope they were compiled. The differences between rents actually being paid, and what landlords are trying to get for vacant units, creates anomalies in the statistics. With very dubious claims of lower rents in Toronto, this is likely only a result of landlords lowering the outrageous rents they have been trying to charge on unoccupied units and does not reflect any decrease in the rents actual tenants are paying for the apartments they live in.

Questions must be asked as to the accuracy of the CMHC survey, when the methodology used is that enumerators who introduce themselves as representatives of the federal government agency, ask landlords or landlords' property managers or superintendents to volunteer rents and vacancies. It would appear likely that some landlords would have a tendancy to understate their real rents, particularly with how well organized landlord lobby organizations are in major centres such as Ottawa and Toronto. A letter sent to Canada Mortgage and Housing, November 19, 2002, pointed all this out, but they have never responded. Does CMHC make any attempts to do spot-checks to verify the information being given to them by those who have a vested interest in understating rents, is in fact accurate? Yet, the full CMHC reports state in their "acknowledgement":

"The (CMHC) Rental Market Survey could not have been conducted without the co-operation of the many property owners and managers throughout Canada. We greatly appreciate their hard work and assistance in providing timely and accurate information. We sincerely hope that the results of this work will provide a benefit to these clients and to the entire housing sector."
Landlords could benefit from skewing these numbers, particularly in Ontario, now that there is a new government in the Ontario Legislature; A government that says it is going to be reviewing the present law, in an effort to replace it with a new Ontario landlord and tenant act.

Ontario city rent increases 1993 to 2003 (1 bedroom apartments)
(Percentage of the whole Ontario rental market, based upon 1995 figures, in brackets)

Toronto     (58% of market):   40.99%
Ottawa     (11% of market):    29.95%
Hamilton    (8% of market):    29.71%
London       (7% of market):   18.62%
Kitchener   (5% of market):   30.51%
Consumer Price Index:           21.20%

While income statistics are not at this time available to us, it is known that incomes have not kept pace with the CPI/rate of inflation and that historically, tenants' incomes do not rise as much as property owners. Also, the CPI may not be an appropriate comparison as it already includes housing costs, so skyrocketing housing costs result in even higher CPI numbers, therefore the disparity between rising rents versus other costs and incomes is even larger. A better comparison, and we are trying to get these numbers, are the yearly changes in Per Capita Personal Incomes which are always lower than the CPI inflation numbers. (The Department of Finance, Canada, used to release the Per Capita Personal Incomes figures in their yearly Economic Reference Tables report, but has stopped doing so.) We are looking for another source of these "unadjusted" statistics.

Of course, those on the Ontario Disability Support Program have had their incomes frozen over this period of time, and those people who have somehow survived on welfare have seen a average 21.6% decrease in income. How can they be expected to continue to pay escalating rents?

Canada Mortgage and Housing Corporation, has historically said that a 3% vacancy rate is a "healthy market". Its doesn't matter what the vacancy rate is, if the rents for vacant apartments are far above what people can reasonably afford, there is no healthy market

While vacancy rates in the largest Ontario metropolitan areas has risen, CMHC attributes the change in vacancies being due decreased tenants demand for rental housing and their purchase of houses or condominium units. While low interest rates are certainly a factor as they state, it is also certain that skyrocketing rents are too. More and more young adults are also choosing to remain at home because of the ever increasing unaffordability of rental apartments. We are aware of more and more tenants having to "double-up" in apartments, or houses, which leads to over-crowding, and possible domestic disputes; These arrangments are prone to collapse.

Tenants are being economically evicted, losing their housing, as they can no longer afford their skyrocketing rents. The CMHC release never addressed the issue as to whether the increase in vacancy rates are the result of doubling-up or people losing their homes, particularly with the huge increase in evictions since the Tenant Protect Act. We are aware, and presumably CMHC is also aware, of the overflowing number of homeless people and families in major metropolitan areas, particularly Toronto; but this information was not a factor in the official interpretation of these numbers.

No level of vacancy can be deemed "healthy" if:

  • The cost of the majority of this vacant housing is at levels unaffordable to those looking for rental housing; and
  • The source of the rent and vacancy statistics is suspect, being volunteered by landlords who would benefit by the probable affects on government policy resulting from any inaccurate figures landlords may provide.

For those who want to only look at the numbers,4 remember that a 5% rent increase for a family that spends 50% of their net income on housing, results in a decrease of 5% in what is left of their income. For a poor family or person, such as a senior on a fixed income, who is spending 75% of their net income on housing (as many are) the 5% rent increase now results in a 15% decrease in money available for food, clothing, medications (or prescribing fees), telephone service, etc. There are people who are forced to spend even more than the above percentage of their income on housing.

This has an effect on not just tenants. When people are doing without the necessities to keep a roof over their heads the small businesses in areas where rental housing predominate feel the negative impacts of severely dropping disposable incomes resulting in some businesses having to close their doors.

Remember the numbers you are reading represent real people.



For more information contact:

Robert Levitt
Webmaster, Ontario and Toronto Tenants web site
e-mail


AVERAGE RENTS AND INCREASES
Area October
1993
October
1998
First
5-year
change
October
2003
Second
5-year
change
TOTAL
10-year
change
Toronto
1 Bedroom $ 627 $ 729 16.27% $ 884 21.26% 40.99%
2 Bedroom $ 773 $ 881 13.97% $1040 18.05% 34.54%
Ottawa
1 Bedroom $ 591 $ 615 4.06% $ 768 24.88% 29.95%
2 Bedroom $ 727 $ 754 3.71% $ 932 23.61% 28.20%
Hamilton
1 Bedroom $ 488 $ 539 10.45% $ 633 17.44% 29.71%
2 Bedroom $ 599 $ 662 10.52% $ 778 17.52% 29.88%
London
1 Bedroom $ 494 $ 515 4.25% $ 586 13.79% 18.62%
2 Bedroom $ 615 $ 637 3.58% $ 736 15.54% 19.67%
Kitchener
1 Bedroom $ 495 $ 545 10.10% $ 646 18.53% 30.51%
2 Bedroom $ 597 $ 641 7.37% $ 754 17.63% 26.30%
Inflation - - 6.90% - 13.28% 21.10%



VACANCY RATES
Area October
1993
October
1998
October
2003
Toronto 2.0% 0.8% 3.8%
Ottawa 1.8% 2.1% 2.9%
Hamilton 2.7% 3.2% 3.0%
London 3.8% 4.5% 2.1%
Kitchener 4.3% 1.5% 3.2%





NOTES:

1 - Rental statistics are from Canada Mortgage and Housing Corporation, with the latest statistics coming from their CMHC Rental Market Survey, Press Release, December 2, 2003
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2 - Areas are "Census Metropolitan Areas" (CMA's) as defined by Statistics Canada, and are the five most populace areas in Ontario (making up over 86% of all the province's rental housing in the top ten CMA's as reported in the annual CMHC rental market survey,) in descending order.

Hamilton includes: Ancaster, Burlington, Dundas, Grimsby and Stoney Creek.
Kitchener includes: Cambridge, Waterloo, and the townships of North Dumfries and Woolwich. .
London includes: Belmont, Delaware, North Dorchester and St. Thomas
Ottawa includes: Carleton, Cumberland, Gloucester, Gower, Kanata, Napean and Vanier
Toronto includes: including the Regions of Peel and York and a large portion of the Regions of Halton and Durham, containing, Ajax, Aurora, Bramalea, Brampton, Caledon, Georgina, King, Milton, Markham, Mississauga, Newmarket, Oakville, Orangeville, Pickering, Richmond Hill, Thornhill and Vaughn.
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3 - CPI statistics are from the Bank of Canada web site, Consumer Price Index Calculator
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4 - Take a simplified example of an income of $1000 a month with a rent of $750 a month, leaving $250. If the rent increases by 5% to $787.50, then the amount left for other necessities drops to $212.50, a drop of $37.50, which works out to $37.50 / $250.00 x 100% = 15%.

If the tenant is paying $850 in rent out of a net income of $1000, as is also occuring, then that person would have $150 a month to spend on other necessities. If the rent increases by 5% to $892.50, what they have to live off of for the month drops to $107.50, a drop of 28.3%.
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