An anti-poverty group is calling a Toronto-based developer’s plan to buy $1 billion worth of single-family homes and turn them into rental properties a “frightening” example of how even more people will be priced out of an increasingly expensive housing market.
The plan, reported by the Globe and Mail on Monday, would see Core Development Group build a single-family home rental business by buying housing stock in medium-sized cities across Ontario, including London, Kingston, Hamilton, Barrie, Cambridge, Peterborough, Guelph and St. Catharines.
The developer wants to expand its footprint outside the province by 2026, to eventually build a fleet of 4,000 rental units in Ontario, B.C., Quebec and Atlantic Canada.
Critics say the move couldn’t come at a worse time. Rents and housing prices are soaring across Canada, creating a shortage of single-family homes and making housing ever less affordable.
Finding decent rent ‘darn-near impossible’
“I find it very frightening. It makes it even harder to find a decent place to rent, which at this point is darn-near impossible,” said Samantha Lawrence, a member of the London, Ont., chapter of ACORN, a community organization of low- and moderate-income people.
“There’s no quality control or property standards.”
Lawrence said she’s been a lifelong renter since moving out of her parents’ house when she was 17. She said that as time marches on, it’s becoming more difficult to find a suitable, affordable place for herself and her two daughters.
Lawrence said despite paying a fair market rate for rent, she’s battled landlords over bedbug and cockroach infestations, windows that aren’t sealed properly and discoloured tap water, problems that many times weren’t fixed.
“I’ve experienced everything from freezing pipes in the winter and having to borrow buckets of water from the neighbours to even flush the toilet, never mind bathe or anything like that, to roofs leaking.”
Tight housing inventories now the norm
Lawrence’s experience underscores what’s become more commonplace in the competitive housing market, where inventories of both single-family homes and apartments are at some of their lowest levels in decades.
In the London area last month, 1,433 homes were sold, leaving the market with so few homes that it would take just over two weeks to liquidate the region’s existing stock, according to the London St. Thomas Association of Realtors.
The latest market rental survey from Canada Mortgage Housing Corporation (CMHC) shows average rent in London was $1,119, up seven per cent over 2019, despite the fact the vacancy rate rose to 3.4 per cent as new units came online last year.
CBC News asked Core Development Group for an interview Monday and received a written statement from chief executive officer Corey Hawtin on Tuesday.
He wrote that Core Development Group chose London, like the other Ontario cities, because of its low vacancy rate.
“We chose markets where there is very little new supply, but where there is a lot of demand. Low vacancies and all markets are growing on a population front, they house a variety of employers and are growing cities without roofs to accommodate that growth.”
The statement said the company is looking to create a “more innovative” supply in response to the housing crisis, and that renters, who the company calls a “rapidly growing cohort,” need “to be advocated for.”
“There is a significant lack of rental availability in the low-rise single-family market. Increasing density through renovating existing homes is the most expedient way to add supply to the housing stock,” the statement said.
“Core’s goal is to provide stable, secure, long-term rental properties in ground-oriented housing for those that are not in a position to buy, but do not want to be relegated to condominium rentals with limited space for themselves or their families.
“We are creating new supply by renovating underutilized and underinvested houses that are geared towards accommodating a second legal and permitted unit.”
‘This may as well be Ireland in the 18th century’
Core Development Group said it’s gearing its offerings toward families who don’t want to live in small apartments, and hopes its foray into rental homes will spur major investment.
Lawrence worries it could be the beginning of the end for mom and pop landlords who rent out single-family homes.
“It’s happening. Everyone is going to have to deal with some major corporation because all these people are going to get gobbled up.”
“This may as well be Ireland in the 18th century or something.”