Financial landlords in Toronto charge monthly rents 44 per cent higher than the average neighbourhood price, according to a groundbreaking new study. The increase translates to $670 more on average.
Acquiring information on rental apartments in Toronto is notoriously difficult, but researchers from the University of Waterloo are the first in Canada to prove that financial landlords are behind rising rents. They also discovered that they increase rents more sharply in neighbourhoods predominantly housing low-income and racialized people.
Map of Toronto showing neighbourhoods by average household income and the per cent premiums financial landlords charge compared to neighbourhood rent. A premium is the percentage more in rent that financial landlords charge compared to neighbourhood averages. The area in bright blue shows areas of highest rent premiums with lowest household incomes. The areas surrounded by pink are Neighbourhood Improvement Areas, which the city identified as having more inequalities. (University of Waterloo)
The findings show that this shift in ownership and the use of housing as an investment result in declining affordability. While the data in this study focuses on Toronto, the large corporations involved operate nationally.
"Most people can't afford the housing they are living in, and these firms are in part responsible for pushing that change," said Dr. Martine August, a professor of planning in the Faculty of Environment at Waterloo. "They are buying up buildings and turning them into investment products, raising the rents and making communities less affordable for people."
Until now, no one had been able to prove that housing financialization was driving up rents. The researchers developed a unique dataset combining data from a range of sources to examine rents in Toronto by property, landlord and landlord type.
"We need more transparent, accessible data. We had to pay for a private database and download information quarterly because it's not archived," said Cloé St-Hilaire, PhD candidate in the School of Planning at Waterloo. "Making databases more transparent could improve people's ability to find out who owns an apartment building and learn how much they charge, increase prices and evict tenants."
The researchers say their findings support policy recommendations from community groups to rein in financial firms. The solutions, they say, involve regulating rental housing, expanding tenant protections, and building more social housing - efforts that will support tenants and housing equality regardless of landlord type.
"The government has goals to improve housing affordability, but their programs give funding to organizations who eviscerate housing affordability," August said. "We don't think that they should be accessing support from the Canada Mortgage and Housing Corporation or Canada's National Housing Strategy."
The study, Financialization, housing rents, and affordability in Toronto, appears in Environment and Planning: Economy and Space.
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