When we compare ourselves, we console ourselves. If the housing crisis is growing in Montreal, the challenges that await tenants in their search for an affordable apartment remain much greater in Toronto, even if we take into account the wage differences between the two metropolises. State of play.
For housing to be considered affordable for a household, the rent must not exceed 30% of the gross monthly income of that household. In the Quebec metropolis, as in the Queen City, the number of tenants who spend beyond this threshold for housing has decreased between 2016 and 2021, according to Statistics Canada. But the percentages remain high. Thus, 28% of tenants in the greater Montreal area are in this situation; a rate that reaches 40.5% in Toronto.
The average income of a tenant household in the Toronto metropolitan area will reach $66,500 in 2020, or $11,100 more than what a tenant household in the Montreal area earns annually, according to data from the Canadian Society of Mortgages and Housing (CMHC).
However, despite this wage gap, a resident of the Toronto agglomeration had to work an average of approximately 178 hours per month at the average hourly wage in the region, in 2021, in order not to spend more than 30% of their gross income on housing, against 106 hours per month in the case of a tenant household in the Montreal region, notes the CMHC.
This difference of 72 hours of work per month between the two cities is largely explained by the fact that rents remain significantly higher in Toronto than in Montreal. You have to spend more there to rent a studio than the average rent for a three-bedroom apartment in Montreal, which in 2021 was $1,193 per month, according to CMHC.
“When I started my PhD, I had a scholarship of $900 each month that came from my job as a lecturer. It wasn’t even half our rent,” says Montrealer Émilie von Garan, who moved to Toronto for her master’s degree in 2015. Living in Toronto, she says, “is constantly looking for a 2e3e4e job “.
Laura Lee, who grew up in the suburbs of Toronto, moved to Montreal in 2012 as part of her studies. “It’s just easier to build a life here because the rents are lower,” says the one who still pays $ 1,725 per month for a “large apartment” with a basement that she shares with two people. in the Villeray district.
The gap is widening
The rent gap between the two cities has also continued to widen in recent years, with annual increases being higher in Toronto than in Montreal since at least 2017, with the exception of last year, if we relies on CMHC data.
According to the latest monthly report from Rentals.ca, which casts a wider net than CMHC in its analysis of rents, the average rent for a two-bedroom unit in the city of Toronto nevertheless reached $3,319 in November. , an increase of 24% compared to the same date last year.
The reasons for this stronger growth in rents in the Queen City are multiple. First, after a deceleration observed during the first year of the pandemic, students and immigrants returned in large numbers to Toronto in 2021 and 2022. Ontario welcomes 45% of newcomers to the country, and three-quarters go to the Toronto area. The same phenomenon occurred in Montreal, but on a smaller scale: Ontario welcomed more immigrants in the fourth quarter of 2021 than Quebec in the last four quarters.
This resumption of immigration after the lifting of health restrictions has caused a “revitalization of rental prices”, also notes in an interview the manager of real estate data David Aizikov, who collaborates in the reports of Rentals.ca. In this context, “demand is growing for rentals, but there is not enough supply”, which is causing rents to rise, continues CMHC analyst Dana Senagama.
Montreal is also better able to respond to an increase in demand than Toronto. There are 26 rental units per 100 residents in Montreal, compared to only 10 in Toronto. This difference can be attributed to history — Montreal was densely built and, even today, is denser than Toronto — but also to the more recent development of the real estate market.
Since 2015, many more rental units have been built than condominiums in the greater Montreal area, says CMHC analyst Francis Cortellino. On the other hand, for the past 10 years, in Toronto, six to seven condos have been built for each rental unit.
Nevertheless, the rental housing vacancy rate has continued to tighten in recent years in Montreal, particularly before the pandemic. In 2019, it reached a historic low of 1.5% in the agglomeration, before rising again in the context of the health crisis. Rents are also rising faster than incomes for many households.
“I think people have to organize themselves to get at least a freeze or a reduction in rents, because right now, because of inflation, it’s like we’re all getting a pay cut” , says Laura Lee. The tenant must allocate more than half of her salary to her monthly rent. However, in Montreal, it is rather new rent increases that are to be expected in 2023, due to the significant increase in property taxes included in the latest city budget.
I think people have to organize themselves to get at least a freeze or a rent reduction, because right now, because of inflation, it’s like we’re all getting a pay cut.
Boomerang effect
Measures to limit the increase were taken in Ontario in 1975, when the province introduced some regulation of rents. But according to the experts consulted, the measure had the effect of reducing the construction of rental housing in the city: 66% of rental housing in Toronto was built between 1960 and 1979.
“Before the 1980s, condos were not popular in the city of Toronto,” says David Aizikov. Then, the construction of this type of housing “exploded”, to the detriment of that of rental housing.
In the past, Torontonians in their early thirties, like Emilie von Garan, opted to buy a house, which reduced the number of tenants in the city. But this is no longer possible for many. A house costs an average of $1,098,200 in the Toronto metropolitan area, more than double the price of a house in the Montreal agglomeration. “The idea of having a house is completely impossible, even the idea of having space for a child,” admits Emilie von Garan, who pays $1,975 a month in rent for a home she lives with her family. friend.
Twenty-eight-year-old Laura Lee has completely ruled out returning to her native Toronto to buy a house there. “It’s just unaffordable in the neighborhood where I grew up because Toronto has done a lot of sprawl,” she says. Although she expects to have a salary equivalent to that of her parents, the one who currently lives in Montreal says that she could never dream of buying a house in the same area as her parents, north of Toronto.
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.