While it is well known that few who wish to settle in Toronto will ever be able to buy a home here, the ever-increasing cost of living in the city has meant that a large proportion of residents actually do not I can’t afford to rent here either.
A startling new report has revealed exactly how much people in TO need to earn to pay for a roof over their head, and that’s not only well above minimum wage, it’s many times over.
I can’t afford the rent in #Toronto. Rental wage vs. minimum wage. @ccpa #canlab pic.twitter.com/GxSMkanCxm
— @policyalternatives (@ccpa) July 18, 2023
While the city’s low earners get the provincial minimum of $15.50 an hour (plus tips for the lucky ones in the hospitality industry), the Canadian Center for Policy Alternatives found that one person would need to earn more than double that – 33, $60 an hour – to afford the rent for a one-bedroom apartment or $40 for a two-bedroom apartment.
These aren’t just those getting entry-level paid jobs on an hourly basis, but more so than many of us if we were to break down our salaries by roles with seemingly impressive titles that require years of training and experience. (That would be about $70,000 per year for a one-bedroom room, more than $80,000 for two.)
We need regulations that keep wages constantly in line with inflation and force companies to do so.
We must also cap rents and interest rates.
— Anti-Fascist Nephalem (@Nephalem2002) July 18, 2023
Notably, this figure assumes someone works a standard 40-hour week and spends no more than 30 percent of their pre-tax income on housing, which is a general measure of affordability.
Unfortunately, that 30 percent figure is a far cry from reality in Toronto, where the cost of renting the average person now accounts for more than 100 percent of their income, and even two full-time minimum-wage workers can’t afford a one-bedroom apartment without minimum wage. They spend more than 30 percent of theirs total income.
“The gap between the rental wage and the minimum wage is so large that in most Canadian cities it is extremely unlikely that minimum-wage earners will escape core housing needs. They’re probably overspending on rent, living in undersized units, or in many cases both.”
Worse still, this analysis was based on data from 2022, which does not take into account the more recent increases in inflation and interest rates that have led to even higher rents.
More people than ever are renting in Canada as the dream of home ownership dies https://t.co/CnKH5KnEwF #Canada #RealEstate
— blogTO (@blogTO) December 7, 2022
The Ontario-wide minimum wage is slated to rise to $16.55 in October, nearly equal to the state minimum wage introduced in April, but people in hourly or salaried positions who are even marginally better paid need not raise their wages, to earn a living wage to keep up with the exorbitant spending that comes with the city.
According to the report, Toronto is the most unaffordable place in Canada, surpassed only by Vancouver, followed by Kelowna, Victoria and Ottawa, even though “rental wages in every single province are well above minimum wage.”
Only three cities had a higher minimum wage than what experts call a one-bedroom rental wage: Sherbooke, Trois-Rivieres and Saguenay, Quebec, and even there, rent affordability is getting worse.
Huge Crisis. Even people who want to stay in their units are threatened by AGIs, demoction, renovation, relaviction (for “family use”). A move almost always results in a huge increase in rent as there is no control over vacant units. Our rent has doubled after 2 forced moves.
— Marta O’Brien (@archhistory) June 20, 2023
Of course, as solutions, the think tank proposes higher wages and less rampant wage suppression policies, a greater supply of rental housing, and a better regulated market that “does not put profit ahead of housing security and allows the use of rental housing”. as an asset class.”