News   Mar 28, 2024
 994     2 
News   Mar 28, 2024
 556     2 
News   Mar 28, 2024
 848     0 

Toronto Rental Cost (& AirBnB) Issues

Though this is more about general house prices- rising rental costs have the same effect in deterring potential employees, putting our city at a disadvantage compared to cities like Montreal.

This was one of the issues small businesses noted that prevented expansion (along with hydro prices), according to the CFIB.


How employers are feeling the wrath of Toronto’s housing bubble

At the end of a recent hiring process, recruiting firm IQ Partners believed it had found the perfect candidate for a vice-presidency with the Canadian Professional Sales Association. He ticked all the boxes – a senior executive in the field with the right résumé and the requisite expertise. He wanted the job, too. But he turned it down for one reason: Toronto’s housing prices.

After looking at listings, the candidate realized he couldn’t afford a “comparable home” in a move from Mississauga to a neighbourhood closer to the CPSA’s downtown office.

“Despite it being a very attractive job and being interested, he decided to decline simply because of the complications around home prices,” said IQ Partners’ managing partner, Bruce Powell. “These situations happen all the time.”

Increasingly, recruiters and employers are grappling with apprehensive job seekers who simply aren’t sure Toronto warrants its soaring real-estate prices. Typical wage gains have fallen far behind housing prices, which jumped more than 30 per cent in the past year. The issue appears to be most acute with executive positions, which attract talent with higher housing expectations.

“This is a state of emergency right now,” said Toronto Region Board of Trade president and chief executive Janet De Silva about the need to reduce housing costs to avoid seriously damaging the local job market. “The challenge is that at a certain point, it’s both the housing market and the lack of regional transit, and it’s a double whammy.”

Twice in the past month – at a dinner with international CEOs and during a visit from a Saudi Arabian delegation – Toronto’s international business community identified the looming housing crisis as a “top of mind concern,” Ms. De Silva said.

“It’s just the overall cost of doing business in Toronto and their ability to recruit in the talent that they want,” she said.

As a result, recruiters are seeing candidates take jobs closer to their bedroom communities, forcing businesses to either move out of the city or toward its core.


“The companies that aren’t geographically positioned around transportation hubs aren’t as attractive,” Mr. Powell said.

He believes that if IQ Partners wasn’t located across from Union Station, many of his own employees, who commute by GO train from places such as Ajax, Barrie, Milton and Oakville, wouldn’t be able to work for him.

Women, in particular, are choosing to abandon job searches, unable to juggle the cost of housing with families and long commutes, according to Ms. De Silva.

As a result, the Board of Trade has begun research into the impact the tough real estate market has already had on Toronto’s ability to attract talent.

Ms. De Silva points out that almost 80,000 new residents are moving into Toronto annually. The Board of Trade estimates the city needs 30,000 new rental units to match that flow. With just 1,500 new units each year, Toronto is nowhere near matching that target.

“We need to fast-track more rental properties,” Ms. De Silva said. “[We’re in] panic mode, where folks feel like if they don’t get in now, they’re never going to be able to afford it.”

Not all firms or sectors have felt the same impact, however.

Sean Kogan, a managing partner with staffing firm Recruiting in Motion, deals with job classes that fall below the traditional $150,000 cutoff for executive status. RIM matches candidates primarily in the $60,000 to $80,000 salary range. Mr. Kogan says that job market remains buoyant and the flow of candidates hasn’t yet slowed.

But he has his concerns.

“I think it might [slow]. I can’t imagine that if [housing prices] keep going up we won’t see an impact,” he said. “The price of jobs has not gone up nearly to the extent that the real-estate market has gone up.”

Mr. Powell says it’s easier now to hire for entry-level jobs than for senior positions because there’s a higher proportion of young workers, in the early years of their careers, living in condominiums closer to the downtown.

“It’s this interesting dilemma where we can help a company like CPSA hire their sales reps more easily than we can help them hire their VP of sales,” he said.

Gassia Maljian, the executive search director for digital recruiter Creative Niche, hasn’t seen tech companies match the rising cost of housing with increased compensation, either.

“Tech companies based in Toronto offer wonderful perks like subsidized lunches and gym memberships, but when you get down to it, salaries aren’t changing and they aren’t reflective of the housing market,” she said. “Those perks are great, but they don’t pay the rent.”

In the creative world, companies are increasingly moving to Hamilton to attract younger, cheaper talent. Animation studio Awesometown Entertainment is one of several creative companies to move to Toronto’s neighbour to the west, according to Glen Norton, the director of the city’s economic development office.

“You can get lost in the creative world in Toronto because it’s just so big, and here you can make a name for yourself and plug into a network,” Mr. Norton said.

“It makes it really easy for us to hire juniors who, when they’re coming out of school, it’s much more affordable to reside somewhere closer to Hamilton,” Awesometown president Lucas Lynette-Krech said.

Hamilton’s real-estate prices are soaring too, though. And Mr. Norton fears young people may begin to bypass the city to move even farther out, to communities such as Brantford.

http://www.theglobeandmail.com/news...h-of-torontos-housing-bubble/article34711867/
 
first 80,000 people not moving to toronto every year. Its a fallacy. Slightly over 120,00 came in the last 5 years as per stats Canada which translates to 20,000 per year, Some of these are live births. Well that means more residents living in Toronto can be given those jobs
 
Like all things Liberal, some good ideas, some bad ones as well.

Are we going to see a pause on rental property development until the end of 2018?

Foreign buyers tax, expanded rent control coming to Ontario

Summary from Reddit:
  • 15% tax an non resident foreigners.
  • Expand rent controls to include all tenants.

  • A rebate of development cost charges to encourage building of more rental housing.

  • A standardized lease document for all tenants.

  • A ban on flipping of pre-construction units by speculators.

  • A review of the rules governing the conduct of real estate agents.

http://www.cbc.ca/news/canada/toron...ing-market-home-prices-rent-control-1.4076283
 
A 3.5 per cent annual rent increase would be far more manageable for tenants than the doubling of rates that have been seen in some Toronto condos this year.

This era of fake news is just getting out of hand. Rents ARE NOT DOUBLING. That example that gets passed around has nothing to do with normal rental rates. If you doubled the rent, then that simply means you were way under market price in the first place, or you want the unit empty.

Please people...remember that the real estate market runs on a very simple concept of supply and demand, and history tells us that any attempt to manipulate this process backfires.

This latest threats by the govt is simply going to cause preemptive rent increases to grandfather in before it happens (already happening), and cancel and/or reduce new supply as well as encourage worse deterioration of existing units. Now tell me how that is going to help the rental market in the long run?



“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
-----Swedish economist (and socialist) Assar Lindbeck
 
Please people...remember that the real estate market runs on a very simple concept of supply and demand, and history tells us that any attempt to manipulate this process backfires.
Not really. We don't live in a free market economy. There is already tons of government intervention in the real estate market, some which has contributed to this bubble.
 
Not really. We don't live in a free market economy. There is already tons of government intervention in the real estate market, some which has contributed to this bubble.

Please explain to me how real estate prices are not not determined by supply and demand, other than the RTA guideline caps? There is gov't intervention with regulations, but prices are ultimately market driven.

We live in a capitalist (free market)/socialist(government) hybrid. You have to separate the two. Trying to make capitalism behave like a socialist tool is why it is dysfunctional. If you want to subsidize a certain portion of the populations housing, then do it directly through tax-based means.
 
Prices are market driven, but the amount of both supply and demand is heavily influenced by those government regulations. I don't think you can really call the market free when there's government intervention like that.
 
New rental buildings can set rents at market rates. Then rent control applies until the tenant vacates, at which time the rent can be reset. I really don't see the problem. If we went back to having a permanently controlled rent, even when tenants vacate, then that would be a different story. Anyone on the market for an apartment will have to pay market rent, so in that sense, it does little to improve affordability; it only enhances security of tenure.

I suppose that some owners who are disappointed at being unable to cash in by jacking up rent by an extreme amount might decide to sell early.
 
That really depends on how long people stay in those units. Are there any studies out there that compare average rents of pre-1991 rental buildings to post-1991 rental buildings? If there is a large difference that would imply tenants are staying for long periods of time and justify developers' concerns about eroding profits under the rent control scheme. If there isn't a difference, then we'd need to examine if the rent controls are doing what they were intended to do.
 
What do you think they are intended to do? The way rent control works in Ontario is not to surpress prices. It is, like the poster above you noted, to enhance security of tenor. It's a social good to stop people from getting priced out of their homes unexpectedly.
 
This era of fake news is just getting out of hand. Rents ARE NOT DOUBLING. That example that gets passed around has nothing to do with normal rental rates. If you doubled the rent, then that simply means you were way under market price in the first place, or you want the unit empty.

Or there is an economic bubble causing prices to rise irrationally that you want to take advantage of.
 
What do you think they are intended to do? The way rent control works in Ontario is not to surpress prices. It is, like the poster above you noted, to enhance security of tenor. It's a social good to stop people from getting priced out of their homes unexpectedly.

I don't dispute that. It just has the potential to leave a lot of people in need of rental housing in a really bad situation. If they persist with the rent controls then they need to follow up with some serious incentives to build more rental units.
 

Back
Top