The Toronto Housing Crisis: A Broader Story than Corporate Landlords

Strategic Insights -

Toronto's housing crisis has been framed as a result of corporate landlords, but a new study reveals that the issue is more complex than that. The researchers found that financial ownership is undermining affordability, but their conclusion overlooks structural failures that have created a market defined by scarcity. The study's focus on a narrow time frame and its reliance on "asking rents" overlooks meaningful concessions often offered by corporate landlords, as well as the fact that rents rose across every type of landlord.

Key Takeaways:

  • Toronto's housing crisis is decades in the making, a product of chronic underbuilding, restrictive zoning, misaligned immigration and housing policy, and stagnant wages.
  • The market is defined by scarcity, which drives prices up regardless of who owns the building.
  • The study focuses on a narrow time frame (early 2022 to early 2024) and a surge in interest rates, post-pandemic demand shocks, and inflationary pressure across the board.
  • Corporate landlords tend to own newer buildings in high-demand areas with modern amenities, which may contribute to higher "asking rents."
  • The study's conclusion is supported by a regression model that is only marginally statistically significant.
  • The data set relies on ownership records that are clearly documented, which may over-represent institutional landlords and under-represent others.
  • Purpose-built rental developers, backed by institutional capital, are part of the limited supply of housing being added at scale.
  • These developers are delivering homes with family-sized layouts, embedded social infrastructure, and professional property management.

Statistics:

  • According to the study, average rents charged by institutional landlords were higher than others.
  • The study found a $18 per unit per quarter rent gap between institutional and non-institutional landlords.
  • The authors note that percentage-based rent increases were similar across ownership types.
  • The study only analyzed data from a narrow window (early 2022 to early 2024) and a sample size that may not be representative of the entire market.
  • Post-Q1 2024 leasing data shows that corporate landlords were among the first to lower asking rents and offer concessions to attract and retain tenants.

Sources:

  • Adrian Rocca Contributor, "The Toronto Housing Crisis: A Broader Story than Corporate Landlords"