NEW REPORT STRESSES INCREDIBLE NEED FOR RENTAL’S IN THE GTA

A new report warns of a rapidly growing rental housing supply deficit in the Greater Toronto Area (GTA). It’s not a mystery that we have an existing housing supply crisis in the GTA. With growing rental rates, and high numbers of immigration in 2023, this problem will not just go away.  

According to a report released by the Building Industry and Land Development Association (BILD) and the Federation of Rental Housing Providers of Ontario (FRPO), the region's rental housing deficit will more than double to 177,000 units over the next ten years.

VITAL SEGMENT OF HOUSING STOCK

“There was a surge in purpose-built rental starts in the region in 2018, but that appears to be stalling out,” said Dave Wilkes, president and CEO of BILD. “Purpose-built rentals represent a vital segment of the GTA and Ontario’s housing stock. 

“They are dedicated rental housing and provide security of tenure. Unfortunately, we are just not seeing purpose-built rentals being built at the scale that is required. It comes down to the economics of building and managing these types of buildings.”

According to the report, purpose-built rental units account for roughly one-seventh of all housing stock available in the GTA, both rental and owned, but slightly less than half of all units available for rent. The region's stock of purpose-built rental housing is ageing, with nearly 90% of it dating back more than 40 years, when 223,954 units were built between 1960 and 1979. In comparison, between 2000 and 2022, only 23,590 units were constructed.

IT COSTS MORE TO BUILD

The report notes that building purpose-built rentals is more expensive for developers than building other types of housing, particularly in major cities in the GTA. This is due to higher initial capital investments and longer waiting periods for projects to become profitable. These difficulties are exacerbated by the way taxes and fees are applied to purpose-built rentals.

“The majority of Ontario’s purpose-built rental housing stock was built before 1980, so new units are essential to provide more choice and take the pressure off aging units,” says Tony Irwin, President & CEO of FRPO.

BILD and FRPO are urging all levels of government to enact policies that will encourage the development of purpose-built rental housing to meet the area's rapidly increasing demand.