When Amanda Kotiesen moved to Toronto’s Yonge and St. Clair area a decade ago, she lived in a 330-square-foot apartment above a bar, and forked over $1,100 per month in rent.
Here, her life has flourished: she fell in love with a neighbour, and they moved together to a bigger apartment nearby with a slightly higher $1,500 rent. But last year, when the couple looked for a two-bedroom with space to work from home — without leaving their cherished building with its secret-garden-like terrace — they were shocked by the price. It was nearly $2,800.
“We didn’t want to leave the building … we have a very good setup and we love our neighbours,” she said. They took the apartment, but even with their two salaries in public relations and web development, their rent now costs about a third of their income. With less money to sock away in savings, goals like buying a home feel even further out of reach.
Kotiesen is part of a demographic that’s increasingly feeling squeezed: renters. A Star analysis of new census data shows that in several neighbourhoods across the Toronto area, tenants are now paying more in monthly housing bills, on average, than homeowners. Those areas buck the long-standing trend of renting being the more affordable option.
In one census tract near Kotiesen’s building — the area between Avenue Road and Yonge Street, hemmed in by St. Clair and Woodlawn Avenues — the average owner in 2016 was spending $2,112 on housing bills. That category includes, where applicable, mortgage payments, rent, property taxes, condo fees and utilities. The average renter paid $1,650.
While costs have gone up for renters and homeowners alike, renters’ costs have risen much faster — up 65.2 per cent to $2,725 in 2021, versus homeowners’ 25.5 per cent increase to $2,650.
The same trend has taken place in Mississauga, just west of Cawthra Road and south of South Service Road. In 2016, renters here paid $1,300 on average while homeowners paid $1,540. Last year, the average renter paid $2,320 while the average homeowner paid $1,992.
Players in the housing sphere, from advocates to planners, see the shift as one way an area becomes more divided, as it becomes harder for renters to move up into home ownership.
“The consequence of that is we’re going to have greater social and economic bifurcation, like the separation of classes,” said urban planner Cheryll Case, adding those rising costs often result in other pressures, such as heightened demand at food banks.
Dania Majid, a lawyer with the Advocacy Centre for Tenants Ontario, noted homeowners are able to use their equity to pad their retirement, as a financial buffer or as a means to help their own children get into the market.
That kind of financial security doesn’t exist for tenants who are barely scraping together their payments each month, she said. “What we learned the hard way during the pandemic was that people do not have even one month of savings in their bank accounts.”
Kotiesen and her husband see buying a home as one potential way of planning for their financial future. Neither has a traditional retirement plan as part of their jobs.
The average cost paid by owners in any one neighbourhood doesn’t reflect the costs of breaking into that market today, because the average includes those who purchased their homes decades ago. It doesn’t include the cost of a down payment. It also remains to be seen how homeowners’ costs will be affected by rising interest rates in the years ahead.
Homeowners have long outspent renters in Toronto’s census metropolitan area; a decade ago, their average bills were $1,516 per month versus tenants’ $1,043. That trend is still visible in areas like Toronto’s Little Italy, or a large swath of southwest Brampton.
But over the last decade, the gap has been narrowing. Where owners in all areas spent 45.35 per cent more than tenants in 2011, it fell to 38.84 per cent in 2016, and to 30.28 per cent in 2021.
Statistics Canada has noted a countrywide trend, meanwhile, of renters’ bills climbing faster than homeowners. The average tenant in Canada last year paid 17.6 per cent more than they did in 2016. The average homeowner’s bills increased by 9.5 per cent over that period.
Toronto is home to some more extreme examples, such as the area between Queen Street and Wright Avenue, from Lansdowne to Sorauren avenues. Here, though owners are still paying several hundred dollars more per month — $2,092 to renters’ $1,790 — renters’ bills are growing much faster. From 2016 to 2021, renters’ average bills went up 48.2 per cent, versus just five per cent for owners.
“It’s quite startling,” Majid said. Generally, the area in and around Parkdale has contended with gentrification, she said, and an increase in housing “financialization” as large companies have come in and purchased older rental apartment blocks as investments. In several cases, those companies have applied for above-guideline rent increases, Majid said, requesting Landlord and Tenant Board permission to charge higher rents for reasons such as major repairs.
If older tenants are pushed out by those costs, she said the rents could surge even higher.
In a neighbourhood like Yonge and St. Clair, Majid believes new housing built in recent years — particularly, more luxury-style apartments — is driving up the average cost for tenants.
Case, the urban planner, believes a major injection of non-profit or community-owned housing could better safeguard tenants from rising costs, if home ownership remains out of reach.
In some neighbourhoods, rising rents haven’t pushed tenants’ bills higher than homeowners’ yet, but it’s evened out the averages. Just north of Meadowvale Station in Mississauga, where the average housing cost was $1,800 for renters and $2,000 for homeowners back in 2016, it rose to $2,200 for renters and $2,226 for owners in 2021.
In others, the change took hold even before the latest census. In both 2016 and 2021, it was more expensive for renters in the census tract between Harbord and College streets, from Spadina Avenue west to Bathurst Street. The average renter paid $1,612 per month in 2016 versus $1,468 for homeowners. That grew to $2,108 for renters and $2,080 for homeowners.
Kotiesen knows her neighbourhood has changed in the last decade. Her favourite bar from her 20s has turned into a health-food store as she’s entered her 30s, and more upscale establishments have opened nearby. She’s happy to see her neighbourhood grow and delights in some of the new restaurants — but the tradeoff has been costs that seem to climb higher and higher.
“We’re thinking next steps, like what does family planning look like for us?” she said. “Being in the city is of the upmost importance for our careers. So, paying this exorbitant amount of rent, how will that impact our ability to ever buy? Is that going to be a realistic move for us?”
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