Do people really pay $9,000 in rent?
Experts say pricey units needed to keep tenants out of lower-end markets
A three-bedroom house in Riverdale for $5,000 a month. A $9,950-a-month modern dwelling with grand cathedral ceilings near Casa Loma. A Wychwood residence nestled steps away from Hillcrest Park for $6,980 per month.
We see them all over the city — upscale homes decked out and put up for rent, often at extraordinary monthly rates.
But who lives there? Why, if they have that kind of cash, do they rent? And how do they fit into the overall health of Toronto’s housing market?
Pricey single-family dwellings are rented out by a range of clientele, according to Toronto realtors. Daniella Gold of the Harvey Kalles Real Estate Brokerage said fly-in executives are often regular shoppers for these types of properties.
“There are people who are working for companies that send them to Canada where they generally have accommodations paid for,” Gold said. “So that’s definitely one.”
This type of rental is essential to attracting top talent to the city, according to James McKellar, professor of real estate and infrastructure at York University’s Schulich School of Business. “It enhances labour mobility at the upper end,” he said.
Erica Reddy-Choquette, broker of record at Royal LePage Signature Realty Erica Reddy Brokerage, has also seen families who are renovating expensive homes lease out big-ticket rentals temporarily while their permanent residence is remodelled.
These rentals are needed to keep their tenants from otherwise shopping around in lower end markets, according to Mandy Hansen, principal at Insight Specialty Consulting.
“It’s like going into a Louis Vuitton store and complaining the purses are too expensive,” Hansen said. “They are, but that’s the market.”
When it comes to purses, there are many affordable options on the market if Louis Vuitton is out of your price range.
However, the housing market is not quite the same, Hansen noted.
Opposition housing critic Jessica Bell agrees.
“Toronto’s housing market must be able to provide rental options for people at all types of income levels,” said Bell, NDP MPP for University-Rosedale. “From high-income, to middleincome, to lower-income levels.”
However, while those with a higher income typically have many more housing options available, those at other levels are left to struggle, she says.
According to Toronto’s Vital Signs 2021 Report, more than 11 per cent of apartments renting for more than $2,550 per month last year were vacant compared with the 0.6 per cent of units left vacant that were renting for less than $625 a month.
Data from the Canada Mortgage and Housing Corp. shows that nearly all vacant units are not affordable to the bottom 40 per cent of the population — who cannot bear more than $1,174 in rent.
“People from principals to teachers to baristas to delivery workers are having difficulty finding a stable home,” Bell said, noting those with lower incomes face the most difficulty.