The lack of affordable housing is forcing Canada’s younger population to search for alternate living arrangements. In fact, a report from the University of Waterloo reveals more millennials are choosing to live at home with their parents, with nearly 80 percent of those young adults doing so because they can’t afford Toronto’s pricey rent.
Daniel Debaissy, a 23 year old graduate, says living at home with his parents was a financially-smart decision he made with the goal of buying his own home one day.
“This is definitely a long-term plan,” Debaissy says. “With the market right now, who can really afford to buy a house?”
Daniel, like other millennials in his situation, are faced with a double whammy.
With current housing prices high and mortgage lending rules increasingly strict, living the dream of home ownership is becoming less attainable. On the other hand, apartment rentals are no bargain, either. A lack of inventory mixed with the high cost of rent is budget breaking for some. The average one-bedroom in Toronto, Canada’s most expensive city, currently goes for $2,200. Vancouver, at the No. 2 spot, is keeping pace, with its average one-bedroom renting at $2,110.
But even when millennials can afford to buy, their desires of wanting to live close to work and community amenities while keeping their options open and assets liquid, makes renting the better bet.
The end result is a market where the demand for “purpose-built” rentals is far outstripping the growth in supply, and condominium rental options – which historically has bridged some of the gap – has also declined.
Property management companies like CLV Group are working hard to close that gap. The company’s specialty is rentals and renters, and it has more than 10,000 units under management in Southern Ontario and Quebec. Its Stoney Creek Towers in Hamilton, for example, is comprised of four high rises of studios up to three-bedrooms and fits the bill for today’s young urbanites — close to work, recreation and more.
Stoney Creek Towers, along with CLV’s other rental properties, are meeting a need for millennials who need a home but don’t necessarily want to buy. With recent renovations and amenities that appeal to today’s renters, its an example of an ideal choice for renters who want quality living while maintaining future flexibility.
According to Craig Jones, a doctoral candidate at the University of British Columbia, the purpose-built rental market once fell under the auspices of the federal government, which built thousands of units each year, but moved away from it in the early 1990s. That is also the time where developers chose to build condos over rentals due to demand and profitability; the private sector moved in that direction and never returned to rentals to fill the gap.
That continuing gap means that new purpose-built rental projects are seen as wins by communities. In June, for example, the Vancouver City Council unanimously approved two projects for 61 rental homes under the city’s Rental 100 program, targeted at average income households.
It’s clear that purpose-built rental communities are needed more than ever and will continue to be a growing need in the future for a range of people. Companies like CLV Group will continue to lead the charge in innovative communities for the modern renter and hopefully encourage other developers to do the same.