Renters in Toronto and Vancouver need to earn over $78,000 a year for the average rent on a one-bedroom apartment to be considered affordable, says a report out Thursday that raises concerns about the cost burden.
The threshold, which works out to a little over $37 an hour, is what it would take to keep housing costs within 30 per cent of pre-tax income and is far beyond what many renters make, said the report by the Canadian Centre for Policy Alternatives.
“Federal and provincial governments need to keep housing affordability on the front burner, even as trade and security take up more policy space,” said David Macdonald, senior economist at the think tank and co-author of the report, in a press release.
Macdonald and co-author Marc Lee say that the amount someone has to make to have their rent be affordable is more than twice the minimum wage, and that of the 62 cities in Canada analyzed, only eight had affordable one-bedroom rents for full-time minimum wage workers.
“Renters are much more likely to be on the lower rungs of the income ladder and live with the fear that even if they live in an affordable rental now, they could be displaced by a renoviction or ‘demoviction,'” said Lee, also a senior economist at CCPA.
If a renter is forced to move, they face the prospects of even higher rates. Rents for vacant apartments, which exclude the lower rents of long-term tenants that form part of the average, require earnings of $46 an hour in Vancouver and $42 an hour in Toronto, the report said.
The wage thresholds are based on the latest rental survey from Canada Mortgage and Housing Corp., conducted in October 2024.
Rents have since been on the decline as the number of newcomers fall and more rental buildings are finished.
The asking rent for a two-bedroom apartment in Vancouver fell almost eight per cent to $3,170 in the first quarter from a year earlier, while Toronto had a 5.6 per cent drop to $2,690, according to an RBC report out last month. Rents for cities including Ottawa, Winnipeg and Quebec City, however, saw increases.
While rents are coming down somewhat in big hubs that generally attract the most immigrants, the RBC report noted that the rental burden is still higher than pre-pandemic levels in all cities except Toronto. And while the pressure has eased somewhat in Canada’s largest city, even there rents still exceed the recommended 30 per cent threshold for median-income households.
