Rentals.ca recently put out a Rent Report that based on current demand and supply, rents could climb 8 per cent in Mississauga through 2020. For sake of comparison, the average rent across the rest of the country is estimated to be a mere 3 per cent.
In fact, the report said that when it comes to significant forecasted increases, Mississauga leads the pack. Other cities where rental rates are expected to increase include Toronto (7 per cent), Montreal (5 per cent), Ottawa (4 per cent) and Vancouver (3 per cent).
The report says that Mississauga finished sixth of 34 cities listed for average monthly rent in November 2019 for one-bedroom units at $1,934 and fifth for a two-bedroom at $2,416.
Rentals.ca and Bullpen forecast that December 2020 rent will be $2,585 per month on average.
The report also talks about the fact that the rising cost of owning a home is discouraging potential home buyers who are in turn putting pressure on the rental market. The rental market unfortunately doesn’t seem to be keeping pace with rising demand.
“Competing in the crowded rental market last year were millennials moving around mostly for new jobs and looking for the best apartment amenities; immigrants finding their way in a new country; and baby boomers retiring, downsizing and selling their homes to capitalize on their equity to rent again. They are tired of mowing grass and shoveling snow,” the report reads.
According to the Canadian Rental Housing Index, 46 per cent of Mississauga households are spending over 30 per cent of their income on rent and utilities.
The report says that while rental rates won’t necessarily climb dramatically across the country, prospective tenants will have difficulty finding affordable apartments—especially as demand continues to outpace supply.
“Rents will continue to climb in 2020 in major metropolitan areas in Canada, but while the increases won’t be as much as the last few years, finding the right rental will continue to be a challenge, according to housing experts from around the country,” the report reads.
The report says that as affordability remains a major issue in the new decade for major metropolitan areas, developers, property managers, rental advocates and governments at all levels will need to think creatively and collaboratively to find solutions to higher rental demand.
Meanwhile Mississauga has wisely taken steps to protect its current rental stock as part of its Making Room for the Middle housing plan. The city’s new Rental Housing Protection bylaw requires developers to obtain a new permit in order to convert existing rental units to condominium units or demolish rental units. The permit could be withheld if the developer wishes to convert or demolish six or more existing purpose-built rental units, the city’s rental vacancy rate is below 3 per cent (the current overall vacancy rate is 0.8 per cent) or rents are 1.75 times average market rent or lower.
While the city is doing its part to protect its rental stock and encourage the development of more units (several new rental buildings have been approved), the report says that some experts are calling for cities to consider more density through “unicorn sites.”
The report also says that cities besides Vancouver could consider whether to tax owners of empty units.
But while experts are calling on all stakeholders to work together to fix the problem, the report acknowledges that “fixing” the rental market, which is dealing with a great deal of disruption, will be difficult.
The report also notes that the shifting rental market is seeing more families rent as opposed to buy, and they are opting to choose to live near “quality schools” rather than transit centres and other conveniences.
Regardless of what measures are taken or not taken, the rising cost of ensuring a roof over one’s head is destined to keep getting more expensive with each passing season. There doesn’t seem to be a viable magic solution to tackling housing affordability. The only thing that can do that is a deep recession and a faltering economy and that is in no one’s interest. -CINEWS