Toronto is in huge trouble unless thousands of rental units get build soon

Oh Toronto, my home and native City, what should we do? Should I stick around and see how the cost of living goes up and wages stay at the same level or should I migrate to a more affordable option more to the north, go to Calgary or perhaps PEI? I know, many have done so, they went, abandoned the ship, but I still stayed, waiting for the clouds to linger, hoping for an epiphany, waiting for the Sun to come out again in the GTA!

Property maintenance — Rental apartments

The Greater Toronto Area (GTA) is experiencing a severe lack of rental housing, and experts are stating that within the next ten years, this shortage might treble to an astounding 177,000 units. In a new report released on Thursday, the Federation of Rental-housing Providers of Ontario (FRPO) and the Building Industry and Land Development Association (BILD) urged all levels of government to move quickly with policies that support purpose-built rental development and address the skyrocketing demand in the rapidly expanding region.

According to Dave Wilkes, president and chief executive officer of BILD, a 2018 boom in new rental projects is not maintaining momentum. “unfortunately, we are just not seeing purpose-built rentals being built at the scale that is required.” This “comes down to the economics of building and managing these type of structures,” according to Wilkes.

According to the survey, less than half of the region’s purpose-built rental units—which make up around one-seventh of all housing stock—are really available for rent. Compounding this issue is the average age of GTA purpose-built rental buildings. Almost 90 per cent of units were constructed in the span between 1960 and 1979, when 223,954 units were constructed — mostly within the sprawling slab-style tower-in-the-park developments that have become ubiquitous in Toronto.

When the Residential Tenancies Act was passed in 1979, it put rent restrictions on apartments, thereby limiting landlords’ ability to create money. This tremendous influx of units came to a halt. 2018 saw a new wave of rent construction coincide with Doug Ford’s victory and the repeal of rent limits in newly constructed housing. But this wave barely measures up to the 20th-century boom that came before. Just under 23,600 purpose-built rental units were built between 2000 and 2022, falling a staggering 200K units short of the 1960-1979 building frenzy.

This current boom may have plateaued, the report citing a number of reasons why developers aren’t as keen to build as they were decades earlier.

The BILD/FRPO analysis claims that compared to the huge sums of money generated by condo sales, purpose-built rental projects in large urban areas like Toronto may be more expensive for developers to finance upfront.Additionally, it mentions the time it takes for a rental property to become profitable as well as the additional burden that taxes placed on rentals built specifically for rentals.

Tony Irwin, President and CEO of FRPO, stated that in order to address the housing problem, “we need to develop substantially more purpose-built rental homes, faster.”

SOURCE