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The rising cost of rent
#1
Yesterday's issue of the Record had a front-page story on rental costs:
https://www.therecord.com/news-story/909...oo-region/

Overall, it's a good article, although I think it's a bit lacking in focus: it starts off with a discussion of rental cost increases, and then digresses into the need for affordable housing. Both are worthy topics, but I think they would have been better served by two separate articles. The current one is a bit rambling.

One issue I had with this was their interpretation of the rental cost data: the CMHC data says average rent in the region rose from $870 per month in 2012 to $1,042 in 2017, with an 18% increase for the average 1BR unit and a 19% for the average 2BR unit. The implication is that renters (who have not moved in that period) have seen their rents go up early 20%, well above inflation -- and in spite of rent controls.

But what the article does not mention is that the new rental units added in that period (4,700 units, or about 15%) tended toward the higher end of the spectrum, with rental developments such as Barrel Yards, Princess St and Trio (as well as higher-end student housing in the university area). These would skew the average even if the existing units stayed the same price. The reality is that there have been some rent increases in the existing units, but not 20%. And new units have been on the high end of the range, not affordable (or even attainable/mid-market).

The mid-market situation should be improving in the near term, with significant developments due to start in Kitchener (Vive's Market Flats, Margaret/Victoria and Queen St S projects, Drewlo's east-end project).

Affordable housing … that's a different challenge. And worthy of its own discussion.
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#2
(12-23-2018, 12:21 PM)tomh009 Wrote: Yesterday's issue of the Record had a front-page story on rental costs:
https://www.therecord.com/news-story/909...oo-region/

Overall, it's a good article, although I think it's a bit lacking in focus: it starts off with a discussion of rental cost increases, and then digresses into the need for affordable housing. Both are worthy topics, but I think they would have been better served by two separate articles. The current one is a bit rambling.

One issue I had with this was their interpretation of the rental cost data: the CMHC data says average rent in the region rose from $870 per month in 2012 to $1,042 in 2017, with an 18% increase for the average 1BR unit and a 19% for the average 2BR unit. The implication is that renters (who have not moved in that period) have seen their rents go up early 20%, well above inflation -- and in spite of rent controls.

But what the article does not mention is that the new rental units added in that period (4,700 units, or about 15%) tended toward the higher end of the spectrum, with rental developments such as Barrel Yards, Princess St and Trio (as well as higher-end student housing in the university area). These would skew the average even if the existing units stayed the same price. The reality is that there have been some rent increases in the existing units, but not 20%. And new units have been on the high end of the range, not affordable (or even attainable/mid-market).

The mid-market situation should be improving in the near term, with significant developments due to start in Kitchener (Vive's Market Flats, Margaret/Victoria and Queen St S projects, Drewlo's east-end project).

Affordable housing … that's a different challenge. And worthy of its own discussion.

I do wish the article looked more deeply into that 20% increase number and why we have seen a lot of high-end units. I've always liked this article as a general synopsis of some of the reasons for that trend. https://www.strongtowns.org/journal/2018...ry-housing But with some of the projects you have mentioned, hopefully we are beginning to see changes around that.
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#3
(12-23-2018, 02:13 PM)dtkmelissa Wrote: I do wish the article looked more deeply into that 20% increase number and why we have seen a lot of high-end units. I've always liked this article as a general synopsis of some of the reasons for that trend. https://www.strongtowns.org/journal/2018...ry-housing But with some of the projects you have mentioned, hopefully we are beginning to see changes around that.

That's a really good article! I already ended up reading a bunch more on strongtowns.org, looks like it'll be another regular read for me. Thanks!

And their explanation of the "filtering" of higher-end units to lower-budget renters makes sense, but it does take time. And given our low vacancy rates we need to build more rental units. They point to zoning restrictions and parking minimums as two things constraining that construction, and I very much agree with that.
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#4
(12-23-2018, 03:33 PM)tomh009 Wrote:
(12-23-2018, 02:13 PM)dtkmelissa Wrote: I do wish the article looked more deeply into that 20% increase number and why we have seen a lot of high-end units. I've always liked this article as a general synopsis of some of the reasons for that trend. https://www.strongtowns.org/journal/2018...ry-housing But with some of the projects you have mentioned, hopefully we are beginning to see changes around that.

That's a really good article! I already ended up reading a bunch more on strongtowns.org, looks like it'll be another regular read for me. Thanks!

And their explanation of the "filtering" of higher-end units to lower-budget renters makes sense, but it does take time. And given our low vacancy rates we need to build more rental units. They point to zoning restrictions and parking minimums as two things constraining that construction, and I very much agree with that.

Happy to share Smile
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#5
I wonder if part of the high end unit conversation is that there are more people who WANT to rent. For a while there was this idea that if you could own, you should. That doesn't seem to be the case anymore.
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#6
(01-01-2019, 01:51 PM)Spokes Wrote: I wonder if part of the high end unit conversation is that there are more people who WANT to rent.  For a while there was this idea that if you could own, you should.  That doesn't seem to be the case anymore.

I think for those trying to buy a house it is becoming harder and harder, plus no one is sure with interest rates, so renting might be a better option.
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#7
(01-01-2019, 01:51 PM)Spokes Wrote: I wonder if part of the high end unit conversation is that there are more people who WANT to rent.  For a while there was this idea that if you could own, you should.  That doesn't seem to be the case anymore.

It is definitely the case that this is the perception I was given, and that is frankly, the reason I own right now.  But even ignoring the actual cost, which sometimes might be lower for renting, there are plenty of reasons why owning is bad (greater liability, more stress of dealing with issues, less flexibility--and also reasons why it's better, more control, etc.).

One thing is abundantly clear to me however.  Much like riding the bus, there is a certain class of people who will look down on someone for renting, I mean, whether these people are above or below renters in actual economic status is irrelevant, they'll still try to look down at renters.  You can see this on FB all the time with discussion of people who describe themselves as "taxpayers" in the city being entitled to more consideration--never mind that renters pay property taxes as well--its a very clear dogwhistle.

Now some people may not give the slightest care to this (like myself), but some do (also like myself--in this case, I ride the bus, instead of rent, and members of my family absolutely are upset about this), I do not care now, but at other times in my life, this would have bothered me...at those times of my life, I bought a house and a car.
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#8
Renting is not inherently bad. Nor is riding the bus. But neither is owning, or driving a car. The key is to make the right choices for your particular situation -- and to accept that others have different situations, and that those same choices may not be right for the others.

Unfortunately judging other people's choices is a very common thing for people to do. I won't blame it on modern society, either: as far as I can tell, this kind of thing has been happening for thousands of years, possibly longer. So I don't have much hope of human nature changing in this regard, at least not in my lifetime.
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#9
(01-02-2019, 10:38 AM)tomh009 Wrote: Renting is not inherently bad. Nor is riding the bus. But neither is owning, or driving a car. The key is to make the right choices for your particular situation -- and to accept that others have different situations, and that those same choices may not be right for the others.

Unfortunately judging other people's choices is a very common thing for people to do. I won't blame it on modern society, either: as far as I can tell, this kind of thing has been happening for thousands of years, possibly longer. So I don't have much hope of human nature changing in this regard, at least not in my lifetime.

I'd say that we're a lot more tolerant of different people than a few hundreds of years ago, where being different in your village would lead to punishment (e.g. being placed in the stocks).
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#10
(01-02-2019, 10:38 AM)tomh009 Wrote: Renting is not inherently bad. Nor is riding the bus. But neither is owning, or driving a car. The key is to make the right choices for your particular situation -- and to accept that others have different situations, and that those same choices may not be right for the others.

Unfortunately judging other people's choices is a very common thing for people to do. I won't blame it on modern society, either: as far as I can tell, this kind of thing has been happening for thousands of years, possibly longer. So I don't have much hope of human nature changing in this regard, at least not in my lifetime.

You are bang on.  When I was taking a course on wine tasting, the instructor said this, "which wine tastes good to you ? That is a good wine!"  Each person has their own unique situation.  There is no right or wrong way, it is what you are most comfortable with..
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