The Ontario government released its fall economic statement late last month, outlining its plan to remove rent controls on all newly-built or newly-converted rental units in efforts to spark new rental building development.
Over the past decade, affordable housing has become an ever growing issue. In areas like Toronto, rent controls have caused developers to repurpose rental buildings into condominiums in order to avoid the limit on their investment. This has led to a shortage of rental units in the GTA. The provincial government claims that removing the current rental controls in Ontario will encourage new rental developments around the province.
In Waterloo Region however, there is no shortage of rental units. According to a recent report by Canada Mortgage Housing Corporation (CMHC), vacancy rates in the region have increased this year to 2.9 per cent. The report also indicates, however, that the average rent in Waterloo Region has also increased by 5.7 per cent over the same period.
Mina Fayez-Bahgat, manager of Waterloo Region Housing, says that the issue in Waterloo isn’t the number of available rental units, it’s the number of affordable units.
“The region has become unaffordable. The number of applications we get for affordable housing has increased by 25 per each year for the last two years. There are over 4,000 households on waiting lists to get into more affordable housing but the ones currently living there aren’t able to transition out. The difference between the maximum rent in affordable housing and the average market rent is just way too high, so even once people are in a better financial position they still aren’t able to afford market rent.”
Although wait times for subsidized housing can vary, some families can expect to wait as long as seven years before a unit comes available. Fayez-Bahgat says that he doesn’t believe that this decision by the Ontario government will have any impact on increasing the available housing in the Waterloo Region but that he is interested to see if this move will, in fact, be enough to encourage developers to build new rental properties.
HIP Developments has several new buildings slated for development within the next few years in Waterloo and has already planned to have the majority of the units marked for rentals. Whether or not these new rentals will have an impact on affordable housing is still unclear but they will serve useful for the increase in tech sector jobs in the area.
With the average starter home in Waterloo now over the $400,000 mark, there is a much higher demand for cheaper housing ownership options in the region as well. While new developments are still popping up around the city, the growing supply has had little impact on climbing housing costs.