Before digging deeply into rental housing, I want to make sure readers understand how the housing supply breaks down. First, the Census (conducted by Statistics Canada every five years) counts the total number of “occupied private dwellings”, which are all dwellings of any kind being occupied by households. In the Census, one dwelling is occupied by one household, and dwellings can be anything from a single-family detached house to a trailer, and including apartments, condos, and townhouses of course. Unoccupied private dwellings are not included in this count, although they are so few in number so as to be inconsequential, and because they aren’t occupied are of no interest to me here. Households can range from multiple persons, either related or unrelated, to lone persons.
Second, the Census separates total occupied private dwellings into two categories: owned and rented. These need little explanation.
Third, total rented dwellings can be separated into purpose-built rentals and non-purpose-built rentals. Purpose-built rentals are dwelling units which were intended from day one to be used as rentals and are usually found in multi-unit properties such as apartment buildings and townhouse complexes. Non-purpose-built rentals, by contrast, are dwelling units which were intended to be owned but which at some point and for some duration were rented by their owners to renters. Generally speaking, purpose-built rentals usually remain so for their entire period of use, while non-purpose-built rentals often switch back and forth between being occupied by the unit owners and by renters renting from the unit owners. In other words, the total supply of purpose-built rental dwellings or units is usually very stable and usually increasing, while the total supply of non-purpose-built rentals is always fluctuating.
Why are these distinctions important? In some cities and towns, non-purpose-built rentals can make up a considerable portion of the overall housing supply, and in some areas, renters are renting more non-purpose-built rentals than they are renting purpose-built rentals. This means that non-purpose-built rentals can sometimes offer a competition to purpose-built rentals, so they need to be considered when conducting market surveys. Also, there are often fundamental differences—amenities, features, overall quality, and asking rents—between purpose-built and non-purpose-built rentals, so conflating the two categories in analysis or combining the two in data calculations can be misleading.
The table below shows this breakdown for southern Ontario’s ten largest cities (by population).
The chart below illustrates the data in the table above.
What’s interesting about this data, which the chart illustrates well, is that housing supplies vary significantly between cities. For example, in Vaughan, a suburban city located in the north GTA, nearly 90% of all occupied private dwellings (or households) are owned and occupied by their owners, while only 10.4% are rented, of which nearly all are being rented from their owners. In Toronto, the proportions are much different: only 52.8% of dwellings are owner-occupied, while slightly more than half of all rentals are being rented from their owners (Toronto of course has a huge supply of condominiums, a large proportion of which are being rented out). Purpose-built rentals make up slightly less than half of all rentals in Toronto.
Please keep these distinctions in housing “tenure” and variations between cities in mind when reading further in this blog—these are important to understand and will come up again in future posts.