Canada's rental crisis: Why we’re losing affordable housing - The Fifth Estate

on this edition of the fifth estate nothing's in the budget that i thought nothing i need thirty thousand dollars to rent a house which i don't have families struggling to keep up with skyrocketing rents we were just seeing nothing that was even remotely affordable it was almost like getting punched in the gut forced to compete for fewer and fewer affordable homes we're going to see more and more canadians priced out of living in their communities i worry we trace the roots of this crisis these firms are making such extravagant profits the idea that they need to raise rents it's kind of insulting actually and find that many renters are left with a sense that no one is looking out for them nobody is talking about the renters nobody and we're just as equally important as somebody owns a home move that's what we're told you can move i'm shayna luck in halifax even in a cold canadian winter housing is a hot topic and the focus is almost always on soaring house prices making it harder to buy but in fact one in three canadian households is renting and discovering that even with an income finding somewhere anywhere to live is getting tougher how did canada fall into a rental crisis and how are we going to get out this is the fifth estate brantford ontario more than an hour west of toronto [Music] a bedroom community where the claim to fame is raising great hockey players [Music] it's also in melanie crawford's mind a great place to raise a family you know when we first moved in everything was uh change tables and like infant toys swings baby seats bouncy seats did you make your wish yep good girl every stage of growing up has happened here you've been letting that hang on for so long you're awesome melanie always planned to be a lifer in brantford we moved in here in 2000 2010 eight days before we had a baby and we've been here ever since so 11 years last september with the kids at the age they are now they've been making friends and having the same friends for all these years i mean 11 years is their lifetime and for us it has been too so we've planted deep deep roots here in this specific neighborhood and watched it grow too it's home for us melanie's family has rented this house for so long it was a shock when her landlord called to say the family of five had to leave all right guys you can come eat snack is ready he said well i need to move in and renovate it to sell it so i had four months notice to change my life of 11 years the worst part was explaining it to her children i was devastated we all cried literally we cried it is the not having options and not having anything that we've built matter at this stage of the game you know because it's that's too bad for us we're out halifax nova scotia a university town a walkable city where mark drennen is a student he's ready to launch his career [Music] i am a master of architecture student at dalhousie university i've accepted an internship in yellowknife with a local architecture firm up there he's 33 he needs a home during his internship and another when he comes back to halifax it makes me nervous the more luxury condos go up the more they pull up the market i am worried that even getting an education and getting a you know a good paying job and you know you're doing everything that you're told to do it may not be enough soon mark knows he'll be putting at least half his income towards rent but he's used to that i know some of my classmates they were living in inns two couples to an apartment because the price is going up and then in that case if it's a one bedroom that living room area becomes curved off and becomes the second bedroom he worries about the future if it keeps accelerating i might have to spend the rest of my life you know with roommates hamilton ontario a city that rose on industry but now rents are rising too when i moved in here it was 7 15 a month all inclusive kevin o'toole feels he needs to hold on to what he has i've lived here since 2010 my wife took sick we moved near my in-laws and then when she passed i moved here i found hamilton still a steel city to me it's still a down-to-earth blue-collar place this floor that i live on i can leave the door open and nobody's ever come in if there's a parcel left there and i'm not home my neighbor will pick it up and let me know that he's got it they all know the dog i love living in this building i love this community and at 72 where am i going to go [Music] they're in different cities in different phases of their lives but all afraid canada's rental crisis will leave them stranded and they're not wrong between 2014 and 2019 rents went up by an average of 20 percent in canada while incomes remained largely the same the crisis of affordable housing is hitting polls are mounting on different levels of government to give tenants a break [Music] the crisis is so dire people line up 20 at a time to view basement apartments some compare trying to find an apartment to the hunger games in eight cities canada mortgage and housing corporation says a two-bedroom is beyond the reach of an average person even if they work full-time experts routinely describe it as a rental housing crisis the headlines are hitting home for melanie in brantford i absolutely want to stay in this neighborhood i did not get a constant upbringing i i lived 22 places in the first 18 years of my life so i didn't get what my kids have and so it's super super important to me that i get to provide it for them so it's a hit and the desire to stay out here is huge for me this is a new one i don't think i've seen that one yet melanie is about to discover what she's up against you know this house looks similar even to the one i have and it's double in price not only is buying a house getting further out of reach renting is too nothing is in the budget that i thought nothing i pay 1450 a month for this four bedroom house and i couldn't get a two-bedroom for that amount of money right now i couldn't so i have to pay double regardless twice what i'm paying right now and i make the same money right i don't know about math but it spells impossible it feels like we're being led to slaughter it's uh so corrupt that we are being charged that it's the same space the same amount of space the same walls the same everything but because people don't have a choice but to rent because they can't get a house or they can't qualify for a mortgage they're just robbing us with this strategy the federal government is not only back in housing but we're here to stay for the long term even five years ago the problem was building the federal government pledged to make sure people could afford a roof over their heads our government recognizes that housing rights are human rights everyone deserves a safe and affordable place to call home and we will introduce legislation to ensure but advocates say years of ignoring housing is coming home to roost the fact of the matter is over many decades the federal government was absent on the housing file so douglas quan has worked on behalf of tenants for 18 years and he's seeing the affordable housing problem get worse it's not funded as well as it should but government has a significant role to play in creating affordable housing they can target what's needed in the communities whereas the private market will focus on what the market needs renters make up 4.4 million households or 30 percent of the population and because they're outnumbered by homeowners the policies that benefit them tend to be fewer and less powerful but how did it all start [Music] home ownership is an idea that was quite literally sold to canadians starting in the 1940s found the realization for their dreams there was a lot of marketing in the 40s and 50s around what home ownership was and it's branded as being more patriotic and you know homeowners are more responsible they have all these kind of positive attributes because they're homeowners well that was all marketing to get people to buy houses but we still actually believe that ren thomas has studied how the federal government created fiscal policies that made it easy to borrow easy to buy in terms of our cities a lot of people actually couldn't afford housing until really the 1940s when we actually enabled long-term mortgages low-interest mortgages there was also a major economic emphasis to this type of work because of course building new housing would create a lot of jobs for people it would you know really jumpstart the economy both the construction part and the purchasing of housing [Music] our national obsession with real estate has only grown since the 1940s and the focus on buying has drowned out the interests of people who are renting when i have to tell my kids that we are being evicted despite being good people good tenants it really hurts something that governments maybe don't think about or maybe generally in the canadian population that we don't think about is that there's probably always going to be a percentage of the population that home ownership doesn't really work for that group [Music] the reality is there aren't enough homes to go around not enough new homes are being built and that's a key factor driving up prices but what's also true is that canada is losing housing that once counted as affordable and it's happening at a startling rate we found one study that shows canada lost more than 300 000 affordable units between 2011 and 2016. that's like losing every household in hamilton not only are we not building new rental housing but we're losing the stock that we have now there's very little in place to protect existing rental housing from either being converted or demolished and i just want to dig into that when we say losing it's not necessarily like they vanish into smoke they're still there but in a different form is that right well they're often being demolished so then those units are just lost the other thing is they were in terms of um like losing them to conversion in in the sense that yeah the units still exist but they've now been converted to ownership units for a higher income bracket since there aren't enough new affordable units being built once one of them has its rent increased it leaves fewer low-cost options for those that need them kevin o'toole has lived in the same building for more than a decade and he only pays a hundred and ten dollars more per month but that's nothing compared to his neighbors who just moved in the guy next door it's a new place he pays 1800 a month plus hydro he's paying a thousand dollars more rent than me for the same thing kevin believes his landlord would be happy to see him move out so a higher paying tenant could move in if i said to them tomorrow i'm moving out they'd be there'd be a dance over at 40 at the office it's happening across canada units like this one in kevin's complex are getting out of reach many places in the country have the same rules if you're a sitting tenant then the rental rates only go up by inflation that's great that's manageable however once that unit becomes vacant then it's open to the market and a landlord can set whatever price that they want to set for that unit there is a tremendous incentive to remove that sitting tenant so once the the old tenant leaves and before a new tenant comes in it's perfectly legal to raise the rent 100 absolutely absolutely at 72 kevin still works part-time at mcdonald's what have i got he likes to keep busy but it's really about making sure he doesn't fall behind on the rent i don't want something for nothing but i if i stop work tomorrow all i have is my pension who can afford 16 1700 a month to find an affordable apartment i'd have to go way to hell up to uh sudbury or somewhere because in hamilton itself worse not as bad as toronto yet but to find affordable housing here uh minimum minimum for what i want would be minimum one bedroom is 1500 a month plus plus to find the affordable apartment no i couldn't do it and i don't think i'm the only one when we come back the clock is ticking for melanie's family to find a new house there's no high schools and public schools and whatnot in the area we're kind of on the edge of the industrial end of town but i honestly don't even know what where the kids would go to school out here [Music] this is the stuff that nobody sees after looking at half a dozen rental properties melanie thought she had a lock on the perfect house but something's gone wrong [Music] so today's email said that our family is great and they wish us luck but somebody else offered a year's worth of rent up front and we can't compete with that so [Music] i need thirty thousand dollars to rent a house which i don't have competition for housing is spreading it's no longer just a big city problem so three bedrooms well it looks like it's been nicely redone these nice hardwood floors melanie has been out of the game for a decade she's finding out the rules have changed previously i just thought oh it's just a matter of figuring out the system or understanding the new dynamics or you know understanding the the route like do i do i use a real estate agent or you know and then when that went when i when i you know felt that i finally met an actual landlord got to speak to them but got to be got to advocate my own family on my own terms and and felt so good right um god accepted and then to have that happen and think like i can't compete with that so that broke me melanie is working from home she's brought one of her old side gigs back to life selling handmade candies and treats i cannot afford it without making an extra four to five hundred dollars a week i have to do that since i found out we were being evicted i have hustled in every which way to you know money saved as money earned right so paid off my credit cards upped our line of credit [Music] do you think you'd like to go with you sure all right get your stuff up there's a little over a month left before she has to move time is running out we're gonna go see a house and then we're gonna go shop yeah if we can't find a house around here then we find a house somewhere else in brantford and we build new routes i believe it's out there this place is a relatively new build it's a two thousand five hundred and fifty dollars a month a three bedroom three baths but an unfinished basement it's not ideal but and this is the kind of thing we're doing we were sacrificing right far from our old neighborhood right there's no high schools and public schools and whatnot in the area we're kind of in the we're kind of on the edge of the industrial end of town but i honestly don't even know what where the kids would go to school out here and that's just one of those things we have to face in this situation it's it's a luxury i don't get to have at this point right i feel i feel the price of the house is ridiculous not that i have an option oddly enough i have been submerged in this twilight zone long enough that there's a part of me that's like only 25.50 right but then i'm like wow it's almost like i just got excited for getting hit in the face with a shovel like it's weird how your perspective changes [Music] canadians all over the country are feeling the same pressure over housing including here in dartmouth nova scotia i'm on my way to visit a family who has to leave their home of 10 years it's the house with the sold sign we received the letter saying the place was sold it was almost like getting punched in the gut you knew it was coming but you couldn't react and you're like well gosh what are we going to do now john and stacy smith's kids are teenagers the family is searching for a house with three bedrooms we were just seeing nothing that was even remotely affordable i've reached out to numerous apartment buildings there just doesn't seem to be much out there for families two bedrooms two bedrooms can cannot accommodate you know a family of four so if you're a family you are really gonna struggle finding a place to live in halifax rents have gone up by close to 20 percent since 2015. the smith's neighborhood hasn't changed much but house rentals have doubled i mean i saw places that were three thousand he's a delivery driver she works in retail but her job's ending soon it's definitely gonna be a struggle even with a small rent supplement from the province things will be tight i have a lot of skills that i can put towards a new job it's just putting myself back out there after 20 years to look for another job it is quite a bit of stress i think there will be a lot of corners cut a lot of things that we will have to cut back on in order to make rent every month [Music] it's incredibly disheartening to see that people just can't afford to live where they've lived for years a place to live dictates where your kids go to school it dictates what address you put on your resume where you go to work it's a social determinant of health it's the start of everything else [Music] the smith family will join more than 3 million canadian households paying more than a third of their income to put a roof over their head that's the level where the federal government officially declares a family's home unaffordable we shouldn't really have anyone that's paying more than 30 percent of their income towards housing it sort of indicates a flaw in the system that we're not we're not meeting the needs of those individuals there is more to the rental story it's not just prices that are changing landlords are too one in five people buying a house now is doing it to rent it out as an investment property and large corporations with shareholders have moved into the apartment market in canada the shift towards this growth of like very large corporate landlords that treat housing as investment products has involved the evolution of smaller real estate companies into these big firms that are growing in terms of sophistication and growing in terms of size and then also growing in terms of their stock business owners those who study housing call this financialization august's research includes real estate investment trusts known as reits large companies that own real estate to produce income for their shareholders reits alone have gone from owning zero units in 1996 to almost 200 000 last year so that's a dramatic increase in consolidation of ownership if we look at other types of financial firms including asset managers and institutional investors and private uh publicly listed companies um collectively they hold about 20 or 30 percent of all like purpose-built multi-family buildings in canada so that's a pretty big amount this means more and more homes are being treated as a commodity rather than a place to live we're seeing this kind of single-minded orientation towards trying to extract as much value as possible out of those buildings the important thing to realize is that those buildings are people's homes and where that money comes from is basically tenants pockets kevin o'toole knows this all too well his building was bought by a reit in 2015. ah here it is when they took over one of the biggest things we had was fears who were they what were they doing he's kept records of the ways he says the new management tried to oust long-time tenants to make way for people who could pay more they wanted the legacy tenants out it was simple as that and they said it move that's what we were told you could move where's the original one the company increased fees for everything from parking to laundry and it offered bonuses to tenants to get them to leave they don't care if i move out of here if the guy next door moves out they don't care they will just bump up the red institutional landlords don't buy just any buildings they target older ones with low rents and there are many to choose from most of canada's rental apartments were built before the 1980s and they're aging these buildings have over the years evolved often into sort of de facto affordable housing you see people on fixed incomes often newcomer families lower income families living in a lot of these buildings and so financial firms have targeted these types of buildings and are raising the rents essentially in these properties so you have higher proportions of racialized people among renter populations higher proportion of single-parent families indigenous households low-income households and people living on fixed incomes so really we're looking at a lower income and marginalized population that is being targeted for this particular profit-making business strategy we have rent control so as long as you stay put you're protected if you are new to this market then you will pay a market rate but michael brooks is the ceo of real pac an association that represents the largest institutional landlords in canada everybody in the private sector is self-interested in maintaining and growing their income and they all want to be seen as contributing to the solution and not being part of the problem however they've got their own obligations they've got their own investors or pensioners to fund they've got to manage costs deeply affordable housing is a public good the private sector is not primarily in the business of providing a public good in halifax university student mark drennen has been apartment hunting for his internship in yellowknife for more than a month so with the yellowknife accommodations it's around the 900 1000 for a roommate everyone says how it's expensive to live up in the territories so i figured it would be a bit more expensive and the housing the rental costs up there reflected that i said okay it's about three four hundred more a month for an equivalent unit in halifax canada's north has one of the highest costs of living in the country most departments in yellowknife are owned by institutional landlords initially it was trying to figure out what the market was like there there's only those few companies been a long process one property company called northview owns more than half of the apartment stock in the city [Music] so if you for some reason that company doesn't accept an application there's only a few other companies up there and their rents are about eight nine one thousand more for an equivalent unit you know i'm not a doctor or a lawyer or something that makes that kind of money when we return [Music] tenants fight back what would be your answer to those folks who who are saying i i just can't afford this i feel for them what i'd say to you is you can't expect them the private sector to solve all social ills [Music] renters outraged by the housing crisis have been taken to the streets back in 2018 kevin o'toole and his neighbors were gearing up for a fight [Music] tenants are doing something we went on strike we went on the red strike kevin's landlord a large company called interrent applied to increase rents by close to 10 percent over two years for renovations to the building we fought them tooth and nail about what the capital expenditures were uh a lot of the stuff they did to us that they fixed was cosmetic did they have to put in those new structures in the front again cosmetic did they have to put in new railings again cosmetic and in here they're stating about the landscaping did they have to plant all these trees which if you look now are still crap like it's cosmetic so yeah cosmetic doesn't help us it's like a scale michael brooks is the ceo of the industry group real pac he argues these rent hikes are standard practice those above guideline increases are critical to be able to enable the landlord to be able to get a return on that extra cost that these that the landlords have to spend to upgrade the building i mean this is like an old house it's the same analogy at some point in time you need to do a lot of upgrades to modernize that house that's really expensive no one would want to see housing deteriorate but are you saying that the only way to keep these buildings in good repair also makes them more expensive for the lowest income people absolutely that's that is the problem there's got to be a middle ground somewhere we're all trying to figure out what are the tools that gets us in that middle ground so there was the old balconies kevin acknowledges the building needed some repairs but he says the company knew what it was getting into when it bought a 44 year old building there are certain things any building if you're a homeowner you'll have to fix this and this is what so many other people say well if you're a homeowner you have to pay all these things but you own the home i don't so you know don't pass it on to me despite kevin and his neighbors efforts their rent still went up by 4.4 in case after case our research showed fighting it almost never works in toronto alone the majority of applications go the landlord's way and the fifth estate found that interrent tells its shareholders the tactics it uses to grow rent that includes apartment suite turnovers and the rent hikes called agis meant to cover the cost of renovations repairs and renovations actually make money for firms and they invest in them because they can extract higher rents afterwards whether it's by applying for an above guideline increase or whether it's by charging more to a tenant that then moves into a renovated unit that's marketed as a luxury unit in the last decade interrents apartment holdings have tripled while the money coming in from these properties has increased five times it's only one of many such companies making significant profits between 2015 and 2020 the top four reits have paid out more than two billion dollars in profits to their investors these firms are making such extravagant profits the idea that they need to raise rents in order to do basic maintenance that is their actual responsibility as a business to me it's it's kind of insulting actually we reached out to interrent but they didn't respond to our requests for comment the company is a member of realpak michael brooks's association so are 124 other big real estate owners and developers your members pay out tens of millions of dollars in profits to their investors every year how does that square with the idea that they can't afford renovations um a lot the top 21 owners of apartments in canada are fund managers for pension funds um reits um a few private companies when you say millions in profits it's flows right through to the end unit holder the end unit holder he refers to are pensioners like kevin because many pension funds invest in institutional landlords though in fact anyone can own shares in these companies do we have to say that it's either tenants or pensioners is there not a middle ground here good question i think there's a role for everybody in solving the rental affordability issue without landlords who have access to capital and scale and good management without that you're not going to meet the housing needs of this country going forward this rich owner narrative to me i don't buy it i think it's an attempt to demonize some of the larger landlords don't buy it what would be your answer to those folks who who are saying i i just can't afford this uh i feel for them it's a problem we all have to address i don't know whether you're putting that problem on our industry's shoulders or not again what i'd say to you is you can't expect them the private sector to solve all social ills [Music] when we come back the federal government acknowledges the problem we need to build more affordable housing in canada and that's exactly what we're doing including but is it enough they're all they're saying is first-time homeowners nobody is talking about the renters nobody [Music] in dartmouth nova scotia the smith family finally knows where their next home will be she got on the phone and she said oh my god oh my god what i'm like see we got the house and i had to go away and cry a little bit i'm not afraid to admit it i mean i was happy ecstatic and it was like it was a part of a a burden that was gone let's put all this inside some of their burdens are still there stacy has taken a new job in a clothing store to help cover the extra thousand dollars a month they're going to need for rent we didn't have christmas because we knew we needed half the month's rent to hold the place if we were gonna get it and if we didn't have the damage deposit they would have took the next people if there was anyone else behind us christmas eve i was able to run out and get the kids a couple of things so that there would be something under the tree for them it was not our typical christmas at all they did without quite a bit this year so stage what do we have left it's just a little stuff that will take through they've gone through the grind of finding a new home and all the extra costs it will bring the move has left the smiths feeling completely drained been here 10 years know all the neighbors super friendly you know it's just it's new chapter you don't always want to start that next chapter it's not always better you know so yeah i'll miss the area for sure i mean we're close but just this was home ten years is plenty of time to make a home and it's exactly how long the federal government gave itself for the plan to make housing more affordable for all canadians years of hard work have culminated in the national housing strategy remember that announcement back in 2017 changing plan to help canadians get into homes and stay there we're halfway through the 10-year strategy are we halfway to the goals no no i think there was a lot of hope with the new national housing strategy that the federal government was you know beginning to engage back in housing in a you know meaningful way but you know i think that this is sort of typical of a lot of federal government programs where it's a national program there's national guidelines on things that sometimes don't work in the provincial you know in the provincial context for weeks we've been asking for an interview but the federal housing minister didn't have time to sit down with us though in february he did speak to a committee of mps about the severe lack of affordable housing for families a lot of work has been done but more work needs to be done and we need to build more affordable housing in canada and that's exactly what we're doing including the recently announced results of the rapid housing initiative 10 250 permanent new affordable housing units to the rapid housing initiative we asked minister hussein how is that enough when canada is losing hundreds of thousands of affordable units his office wrote back that a single affordable housing project can take up to three years to complete and that the national housing strategy initiatives are taking steps to fill important supply gaps in the canadian housing landscape but we know there is more to do the minister didn't answer our questions about how many affordable units have been built under the national housing strategy or what the rent in those units is kevin o'toole has no confidence that help is coming all they're saying is first first-time homeowners nobody's talking about the renters nobody and we're just as equally important as as somebody owns a home i don't want something for nothing i wasn't brought up that way and most of my friends aren't either but damn let me live his landlord is applying for another rent hike to cover the cost of more renovations i'm not moving out of here i will fight them tooth and nail if i have to go by myself i am not letting them get away with it [Music] mark's move to yellowknife is approaching i did not get a reply for a few weeks and so i kind of poked at them like you know i'm still here any of these buildings is fine the property company northview finally accepted mark's application and is now his new landlord it's been a long process it's been a little over a month i think but i was able to sign a lease it's a relief to know that i'm not going to be broke or starving i have a place up there for the eight months just so long as i have a roof over my head and i can eat that's my priority and it's it really shouldn't be a high priority for anybody but it is these days just having the bare basics he has a place for now but he's not sure he'll ever progress to something else obviously i would love to buy a place to live but the longer you save for a home the more out of reach the home becomes we're gonna see the next couple of years more and more canadians priced out of living in their communities large families that should be living in a two or three bedroom home only able to live in bachelor apartments you know it is a serious crisis that we're facing [Music] back in brantford melanie crawford's family has a new home too we got the call and it's happening we did it we did it we did it [Music] we're paying 1100 more a month for significantly less space and we've had to literally either throw out sell or donate you know almost 30 percent of our what we've built in the last 12 years the family has pared down a lot they're concentrating on the good stuff it was really important to me that we focused on building a home with what we could take and that's how we started this process everybody just started gathering the things that they loved the most and that were most important to them but along the way they've learned some hard truths about what it means to be a renter in canada there are no incentives there are blocks and they're just getting worse if you're somebody that's renting and you are facing what i'm facing right now and you do not have the advantages that i have right now then you're going to be homeless [Music] you

Channel: The Fifth Estate

Views: 1,334,590

Keywords: rent, rental prices, rent in Canada, housing, affordable housing, low income housing, real estate, Canadian real estate, home prices, house prices, inflation, CBC, CBC News, Fifth Estate, The Fifth Estate, CBC Fifth Estate

Id: LSKOfmrHfQ4

Length: 42min 52sec (2572 seconds)

Published: Thu Mar 10 2022