(Brampton) – Lower vacancy rates and a loss of rental housing stock are limiting affordability for thousands of households in Peel Region.

The findings of a recent report to Regional Council indicated that lower vacancy rates, reduced rental stock, higher immigration, rising home prices and increased employment are combining to create a continued lack of available affordable rental housing in Peel.

In 2001, Peel experienced a low vacancy rate of one per cent which then climbed to 5.0 per cent in 2004. In 2005, that trend reversed to a 4.1 per cent vacancy rate. Despite the downward shift, vacancy rates are still at the fourth highest level on record in the Toronto Census Metropolitan Area (CMA). The City of Brampton is an exception with a significantly lower vacancy rate of 2.9 per cent.

The vacancy rate is a measure of how many rental units are available to rent immediately. A vacancy rate of 1.0 per cent indicates that for every 1,000 private sector apartment units, 10 units are vacant and available for occupancy.

“Although the market has eased, thousands of Peel households faced with rising energy costs and the increasing costs of living still continue to experience an affordability problem because the average rents we’re seeing are still out of reach for them,” said Pat Mullin, Regional Councillor and Chair of Peel’s Housing Committee.

Average monthly rents were $973 for all unit types in the Toronto CMA in 2005, unchanged from 2004.

“For someone making the minimum wage of $7.75 an hour and working 35 hours a week, an affordable level of rent would be no more than $353 to meet the affordability guideline of 30 per cent or less of gross income spent on housing,” said Mullin. “The current average rent in Peel is almost three times that affordable level.”

Between 1989 and 1996, more than 7,000 assisted rental housing units were built in Peel with the help of senior government funds. After 1995, provincial and federal social housing funds stopped flowing. From 1997 to 2005, only 367 assisted rental housing units were built in Peel as senior government funds gradually began to flow after 2001.

“Affordability will continue to be limited by available supply,” said Mullin. “In 2005, only 1,525 units were available to rent in Peel while 14,000 households remain on the Region’s waiting list for subsidized housing. Most of our housing applicants will wait eight years for an available subsidized unit. Many of those households currently pay over 50 per cent of their income on housing.”

A number of factors emerged to contribute to the lower vacancy rates in 2005:

• immigration rates increased in the Toronto CMA including Peel;
• rental housing was the initial choice for 75 per cent of new immigrant households settling in Canada to satisfy their housing needs;
• rising home prices and increasing carrying costs have pushed would-be buyers in the Toronto CMA into high-end rentals where move-in incentives are providing more value;
• stronger job growth has contributed to net rental demand; higher home ownership costs are encouraging many younger workers to move into rentals;
• Peel’s rental inventory decreased; the City of Mississauga lost just over 500 apartment units from its rental stock due mainly to condo conversions between 2004 and 2005; the number of rental units for the City of Brampton stayed relatively the same during that time.

Peel anticipates some relief to Brampton’s rental market in the next few years when current condominium developments are completed, since most of the occupants, whether owners or tenants, would otherwise be living in conventional rentals at that time.

The Region continues to address the community’s affordable housing needs through building modest income housing and targeting new rent supplement dollars. It considers its most recent developments as leading edge innovations that combine affordable housing with social support programs for high-need families and youth. Another 250 units are currently in development. As well, Peel has aggressively pursued new rent supplement dollars over the last couple of years which top up people’s rental payments in private buildings and thereby help to get people off Peel’s waiting list for subsidized housing. Almost 900 additional households are being subsidized in this way, including 270 households under the latest Federal-Provincial housing allowance program, in which Regional Council agreed to participate.

“Peel is proud of its progressive approach to addressing the community’s affordable housing needs, but we know that what we can provide merely scratches the surface of need,” said Keith Ward, Peel’s Housing Commissioner. “The fact remains that the overall loss of rental inventory in the current housing market combined with lower vacancy rates will very likely have an adverse impact on the available supply of rental units, thereby continuing to limit affordability for many of Peel’s low-income households.” 

For more information on Peel’s social housing needs and initiatives, visit peelregion.ca/housing.