Rising Rental Costs and You

Edited by Sanghmitra Khanna

Being a university student has never been so expensive. With rental prices in Toronto reaching an all-time high, students struggle to flourish during their post-secondary education. Who is to blame? What actions are they taking?

The highest jump in decades

Seven years ago, one-bedroom apartments in Toronto cost $1,202 per month¹. Adjusted for inflation (through the Bank of Canada Inflation Calculator), the average price should be $1,469 a month, yet the average cost for a one-bedroom unit in 2024 is $2,495².

This increase has been reflected in the lives of university students in Toronto; Rentals.ca has stated that the number of listings for shared accommodations has increased by 72% compared to last year³. At UofT, eleven student residences serve a small fraction of UofT’s 67,240 student population⁴, suggesting that a majority of students must find housing elsewhere in the GTA (Greater Toronto Area), some of the highest cost-of-living areas in Canada. 

The discourse surrounding the housing crisis posits blame on different players: the federal government, the provincial government, landlords, and even post-secondary institutions.

Too many people; so little space

Following the baby boom, Canada, like most countries, is facing a worker shortage as the demographic retires⁵. To fill this gap, Canada has been bringing in more immigrants over the past ten years. From 2021 to 2022, Canada brought in nearly 500,000 immigrants, doubling the amount from 2020-2021⁶. 

With the sudden increase in Canada’s population, housing has failed to keep up with the demand, thus increasing the cost of housing overall. Additionally, sparse housing across Canada, especially in student areas, has forced renters to live in unfavourable and unsafe conditions. For example, Guelph University student Alexandra Mussar told CBC News about her unsafe student accommodation with evident water damage, a unit she shared with six other students. Mussar paid nearly $1,000 a month for it in 2023 and said that she “had no other choice” with the high cost of living in Guelph⁷.

Possible action from the government?

Calls for solutions to the housing crisis and the exorbitant prices have finally pushed the provincial and federal governments to take action. Still, some say their plans are not enough for the issues students and renters face.

In January, Ottawa imposed a two-year cap on the number of international students permitted to enter Canada⁸. While this may help slow the growth rate of Canada’s population, solutions are still needed to help Canadians who are currently looking for housing in Canada.  

Later, the Department of Finance announced an investment of $123 million to build more than 5,000 affordable homes to meet the increasing demand⁹. Sean Fraser, the Minister of Housing, Infrastructure, and Communities, has stated, “To solve the housing crisis, we need to change how we build homes.” Additionally, the Apartment Construction Loan Program has received over $40 billion in funding from the government to support more than 101,000 new rental homes across Canada by 2031-32. 

Finally, Ontario has announced plans to introduce guaranteed housing options for international students attending colleges and universities¹⁰. 

Trouble for colleges and universities

While a decrease in the number of international students may aid the housing crisis slowing, a gap is created elsewhere within the education sector.

Many colleges and universities rely on the tuition fees from international students to support their infrastructure as the provincial government fails to provide adequate funding for these institutions¹⁰. Some colleges and universities say that international student admissions are pertinent in ensuring that their post-secondary institutions function.

For example, Nova Scotia’s Department of Advanced Education has addressed the gap a decreasing number of international students will have on the province, stating that they will work with the federal government to address these concerns⁸.

At UofT, about 40% of the student population are international students⁴. According to the 2023-2024 budget report, 68% of UofT’s revenues come from tuition and fees¹¹. This means that most of UofT’s budget comes from tuition fees, particularly for international students, who pay higher tuition fees than domestic students⁴. With a possible limit imposed on the number of international students permitted into Canada, universities and colleges are strapped for funding.

What solutions are needed?

Rising housing costs can be attributed to the influx of Canada’s population and the lack of infrastructure available to support this growing number. While Ottawa has announced a temporary 2-year pause on international student visas, universities and colleges that rely on the tuition fees from international students must look for funding elsewhere.

What is needed to fill the gap and reliance international student admissions have left on the Canadian post-secondary system? A clear increase in funding from the government for post-secondary institutions relieves post-secondary institutions from their continued reliance on international student tuition. Just earlier this year, Ontario announced a $1.3 billion investment in Ontario’s post-secondary institutions that will support research and innovation, target structural issues, and allot funding for capital repairs and equipment¹². While a step in the right direction, most post-secondary institutions find this amount to be insufficient. Higher Education Strategy Associates believes that Ontario would need $7.1 billion per year to meet the needs of post-secondary institutions.

Further, guaranteed housing for international students means less competition in the housing/rental market, which may reduce rental prices. As the Minister of Housing, Sean Fraser has stated, “bad actors”, such as diploma mills, are exploiting international students, which Fraser states are the roots of the problem⁹. If institutions are held responsible for the number of international students they take on by requiring them to guarantee housing for these students, the housing market may finally slow down.

To see a decrease in the cost of living requires more than limiting policies that bandage cracks in systems: more permanent solutions, such as a larger budget, are needed to accommodate the many holes left in the education system as post-secondary institutions look elsewhere for their funding.

How to protect yourself during rental shopping

As a university student, finding a rental during the school year can be one of the most stressful things to do. According to Loans Canada, rent is expected to increase by 5% throughout 2024¹³. Here are some tips on how to stay safe and protect yourself during your rental-hunting time

Buddy system: find a roommate

Finding a rental is daunting, but having a possible roommate you know you would want to live with for the following year can alleviate some stress. If you were not able to find a roommate through personal connections, don’t worry! UofT has a roommate finder, where other UofT students post profiles with their needs and housing preference; an easy way to find a compatible roommate through a trusted source.

Try to visit possible rentals in person

For a lot of UofT students, viewing rentals in person may be difficult, but it is the best way to ensure that you are finding a legitimate listing. Online scams are notorious for their enticing visual images and “legitimate” information. 

If you cannot view a rental in person, ask the property lister (the person renting out the unit) to video call you with a tour of the unit. If they refuse, don’t trust them. Additionally, if you think the pictures are too good to be true, reverse-image searching can help you find out if the pictures are legitimate.

Never send money without a verified contract

Along with fake listings, many online scams will ask tenants to send money through unverifiable sources, such as PayPal or even shares of BitCoin. If paying for your first month’s rent, make sure the method of sending your rent is trustworthy, such as e-Transfer, cheques, or other affiliate banking systems.

It is also illegal to ask for more than first- and last-month’s rent in Ontario. Beware of any listings asking for more than this; any violations of the Residential Tenancies Act [2006, SO 2006, c 17]¹⁴ means that the contract is void. Review your rights as a tenant according to Ontario’s Residential Tenancies Act.

Find a realtor

Did you know that realtors are paid by the landlords offering a unit, and not by you, the tenant?¹⁵ If you can, talk to a realtor about finding a possible rental: it is a quicker, less stressful way to find legitimate listings. Additionally, realtors can represent you if you are unable to be in Toronto during your rental-hunting process.

Refernces

1. The Canadian Press. “Canada’S Average Asking Rent Jumped to Almost $2,200 in February.” Global News, 11 Mar. 2024, globalnews.ca/news/10352202/rent-prices-february-2024-canada.
2. Myles, Jessica. “Average Rent in Toronto Since 2000.” Toronto Rentals Blog, 31 Jan. 2018, www.torontorentals.com/blog/average-rent-in-toronto-since-2000.
3. Urbanation. “March 2024 Rentals.ca Report.” Rentals.ca, Mar. 2024, rentals.ca/national-rent-report.
4. “About Us – Quick Facts.” University of Toronto, www.utoronto.ca/about-u-of-t/quick-facts.
5. Government of Canada, Statistics Canada. A Generational Portrait of Canada’s Aging Population From the 2021 Census. 27 Apr. 2022, www12.statcan.gc.ca/census-recensement/2021/as-sa/98-200-X/2021003/98-200-X2021003-eng.cfm.
6. “Immigrants in Canada 2023 | Statista.” Statista, 11 Mar. 2024, www.statista.com/statistics/443063/number-of-immigrants-in-canada.
7. Patel, Nisha. “Would You Share a Single Room With 3 Other People? Why Student Housing Is in a Crisis.” CBC, 13 June 2023, www.cbc.ca/news/business/student-housing-crisis-1.6874088.
8. Wherry, Aaron. “Federal Government Announces 2-year Cap on Student Permits.” CBC, 22 Jan. 2024, www.cbc.ca/news/politics/miller-cap-international-students-1.7090779.
9. Department of Finance Canada. “Government announces new action to build more than 5,000 affordable homes and strengthen competition to low…” Government of Canada, 27 Feb. 2024, www.canada.ca/en/department-finance/news/2024/02/government-announces-new-action-to-build-more-than-5000-affordable-homes-and-strengthen-competition-to-lower-prices-for-canadians.html.
10. Callan, Isaac, and Colin D’Mello. “Ontario Sets Out New Rules After International Student Cap.” Global News, 30 Jan. 2024, globalnews.ca/news/10253448/ontario-rules-college-university-international-student.
11. Planning & Budget Office. Budget Report 2023-24 and Long-Range Budget Guidelines 2023-24 to 2027-28. 2023, planningandbudget.utoronto.ca/wp-content/uploads/2023/07/23-24-Budget-Report.pdf.
12. Albarran, Maria. “The Implications of Ontario’s $1.3 Billion Funding to Universities and Colleges.” Her Campus, 13 Mar. 2024, www.hercampus.com/school/u-toronto/the-implications-of-ontarios-1-3-billion-funding-to-universities-and-colleges.
13. Rennie, Lisa. “Will Rent Increase in 2024? – Loans Canada.” Loans Canada, 18 Mar. 2024, loanscanada.ca/rent/rent-increase/#:~:text=Rent%20prices%20will%20likely%20increase%20throughout%202024.%20According,the%20already-high%20rent%20prices%20renters%20are%20currently%20paying.
14. Residential Tenancies Act, 2006, SO 2006, c 17
15. Grant, Corben. “How to Use an Agent to Find a Rental.” www.canadianrealestatemagazine.ca, 24 Oct. 2023, www.canadianrealestatemagazine.ca/news/how-to-use-an-agent-to-find-a-rental/#:~:text=There%20is%20virtually%20no%20cost%20to%20the%20tenant,fee%20upfront%20from%20the%20renter%20to%20begin%20working.