Corporate property owners contributing to the rise in housing rent in Toronto

Companies that own rental housing properties charge higher rents across all building classes than the average neighbourhood price in Toronto, according to a new study released Tuesday.

 

The research from the University of Waterloo shows corporate landlords – including private equity firms, real estate investment trusts (REITs) and other asset managers – charged rents that were 44 per cent higher for multifamily units than the average price for the same housing types with other landlords from 2022 to 2024. The researchers said their work is the first in Canada to determine a link between corporate landlords and rising rental prices.

 

“Most people can’t afford the housing they are living in, and these firms are in part responsible for pushing that change,” Martine August, a professor at the University of Waterloo’s faculty of environment and one of the research authors, said in a news release. “They are buying up buildings and turning them into investment products, raising the rents and making communities less affordable for people.”

 

The higher rental rates amount to an average additional $670 a month, an increase that is especially pronounced in low-income and racialized neighbourhoods, according to the research.

Cloé St-Hilaire, a researcher at the University of Waterloo and study co-author, said corporate landlords target vulnerable areas owing to lower rents and greater opportunities for increases when tenants move out.

 

“They will use the properties in lower-income neighbourhoods, do renovations upon turnover and then charge the highest rent possible. So this contributes to gentrification, and it also changes the social composition of the neighbourhoods,” she said in an interview.

 

The study also found corporate landlords increase rent faster than any other owners, asking $96 more every three months, an average of 5 per cent.

 

Ms. St-Hilaire said the research project started building the dataset in 2022, and included information about ownership types for the 1,600 buildings in the GTA the researchers focused on.

 

This highlighted the importance for the researchers of more transparent data on rental housing that can benefit and empower renters, according to the new release.

“We had to pay for a private database and download information quarterly because it’s not archived,” Ms. St-Hilaire said in the release. “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 research recommends that the erosion of housing affordability resulting from corporate ownership should be counterbalanced by policies that regulate rental housing, protect tenants’ rights and support social housing regardless of the type of landlord.

 

“The government has goals to improve housing affordability, but their programs give funding to organizations who eviscerate housing affordability,” Ms. August said in the press release.

 

“We don’t think that they should be accessing support from the Canada Mortgage and Housing Corporation or Canada’s National Housing Strategy.”

 

 

 

 

This article was first reported by The Globe and Mail