Hamilton Social Landscape
Hamilton’s Housing Crisis:
2010-2023 Trends in Rental Housing
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About this report
Data definitions
Hamilton rents vs. inflation
Hamilton rents by unit size
Change in rent in Hamilton and Ontario, compared to prime interest and inflation rates
Change in rents compared to population growth
Neighbouring communities
What next
About This Report
A 2023 SPRC report, Hamilton’s Housing Crisis: Financialization Overview, explained how the rapid increase of investors in the housing market transforms housing from a place to live to a vehicle for profit. One example is in the form of Real Estate Investment Trusts (REITs) and other corporations investing in new or resale housing for investment growth. Another example is individuals owning multiple properties for short periods to resell at a profit, or putting units on the short-term tourist rental market instead of the long-term rental market. This financialization of housing trend is occurring in Hamilton and across Canada, eliminating affordable rental housing across the country.
This report builds upon the Hamilton’s Housing Crisis: Financialization Overview, presents an update to the data in SPRC’s previous Hamilton’s Rental Landscape reports and shows that the rental housing market is continuing on a harmful trajectory of ever increasing rents, with the largest increase ever recorded in the last year alone. For additional context, please see the SPRC’s new Mapping Core Housing Need across Hamilton report.
This report also builds on reports about housing by other community partners including:
Hamilton Community Foundation: Vital Signs 2023 Hamilton Housing
Data Definitions
This report explores rental data from CHMC’s annual Rental Survey. This data is collected from landlords, and includes units in primary market rental buildings only. The Rental Survey samples a portion of landlords, and collects data in October of every year.
This data on “primary market rental units” in Hamilton represents about 50% of renter households in Hamilton.
“Primary” means buildings that were originally built as rental properties, and have at least 6 units. The data does not include about one third of of rental units in Hamilton, which are in the “secondary” rental market, such as units in condo buildings, basement apartments in a house, duplex or triplex buildings, or many other forms of legal rental units, that are harder to track than units in the primary rental market.
“Market rent” buildings are privately owned rental buildings, and exclude non-profit or municipally owned buildings which have rent geared to income, or other rental subsidy for tenants. (Subsidized housing represents about 15% of rental units in Hamilton.)
The first charts in this report focus on “CMHC Average Market Rent” data. This is an average of rents among the primary market rental units included in the CMHC Rental Survey, including both rental units currently occupied by renters (the majority of units in the survey), and units “on the market” available for rent (a minority of units surveyed).
Charts in Figures 3 to 6 use a different indicator what CMHC calls “Change in average rent”. This data is calculated by CMHC using only the same units in the sample (occupied or not), and new units added to the market in recently constructed buildings are excluded. Units that may no longer be rented will also be excluded (for example under renovation, or if a building is destroyed by fire). This makes the “Change in average rent” indicator a representation of the change in the current universe of primary rental stock, without the influence of newer units, or units that are lost to the rental market.
Hamilton rents vs. inflation
CMHC Average Market Rent in Hamilton has almost doubled since 2010, while inflation has increased in by 36% in that time.
Hamilton renters were pounded by a record rent increase between 2022-2023 of $189 (Figure 1).
The grey area in the chart highlights that rent increased from $1,242 to $1,491 in just one year. The increased from 2022 to 2023 was 14.1%, nearing $200/month. This is a larger increase than seen in any other Ontario community, according an analysis of CHMC data.
How do rents vary by unit size?
Examining average rent by unit size, the trends show that on average regardless of number of bedrooms, Hamilton’s rents are increasing dramatically (Figure 2).
The grey area in the chart highlights that rent increased dramatically in all unit sizes between 2022 and 2023. In just one year, rents increased by 9.5% in Bachelor units, up to just under 14%, in 1 and 2 bedroom units, and 12% in 3+ bedroom units.
Figure 3 shows that Hamilton’s changes in average rent by unit size has been larger than Ontario, in the 2022-2023 period.
Change in rent in Hamilton and Ontario, compared to prime interest rate and inflation rates
To further explore indicators that have an influence on rents, Figure 4 examines CMHC’s “Change in average rent” indicator, for both Hamilton and Ontario, compared to the change Statistics Canada’s Consumer Price Index (inflation rate), and the Bank of Canada’s prime interest rate.
Hamilton’s rents have increased at a faster rate than both Ontario’s rents and inflation. Ontario’s rents have increased in very close correlation with the change in the prime interest rate. The increases in the prime interest rate makes mortgages for home owners more expensive, so fewer renters can afford the larger cost of moving out of the rental market.
But Hamilton’s rents have increased in the 2022-2023 period more quickly than the changes in the prime interest rate.
Change in rents compared to population growth
The charts in Figure 5 compare Hamilton (blue) and Ontario (green), with overall population growth at the top (dashed lines), and CMHC’s change in average rent at the bottom (solid lines). In the centre, growth among the 20-34 age group is included (dotted lines), since this is the age group with the highest proportion of renters.
The trends show that Hamilton has had slower overall population growth than Ontario in most years.
In almost all years, both Ontario and Hamilton have had higher growth among young adults aged 20-34 than overall population change. Ontario’s growth in young adults are closely tracked by the change in average rent province-wide.
But in Hamilton, from 2022 to 2023, there was a 3.1% growth in young adults, compared to a 14.4% change in average rent in that time.
Neighbouring communities
The comparison of change in average rent in neighbouring communities (Figure 6), shows Hamilton’s trend was relatively similar to other communities between 2010 and 2019. During the pandemic years, Hamilton’s along with Brantford and St. Catharines had only a very small decline in the rate of average change in rents. In contrast, communities in Toronto and Burlington saw very low increases in change in average rent.
Post-pandemic, all communities had similar increase in average rent (in the 5-7% range) in 2021-2022, but in the 2022-2023 year, Hamilton’s increase of 14.4% dwarfed the other communities.
What next?
The most direct and concrete step that must be taken to solve Ontario’s rental housing crisis is improve the Residential Tenancies Act to protect tenants and market affordable housing. The Fair Rent Ontario coalition is calling for full rent control in Ontario through:
- Eliminate the November 15 2018 rent control exemption
- Remove vacancy decontrol and bring back rent control for new leases on vacant units. Create a rent registry to keep track of rents.
- Eliminate Above Guideline Increases
Robust research shows that rent controls (different than rent freezes) do not harm the supply of rental housing, and a comparison of rent supply and rental rates in Hamilton and Quebec city, Ontario and Quebec from the SPRC in 2018 showed that Quebec’s stronger rent control and tenant protection regime led to both lower rents and larger supply of rental units. This happens because rent controls make renting a more secure and attractive form of housing, increasing the number of renters, which benefits landlords and rental housing developers. And Ontario’s experience shows that an out of control rental market is a drag on economic growth – everyone suffers when renters have unaffordable housing and therefore less money to spend in other sectors of the economy. Furthermore, unaffordable housing is also associated with poor mental and physical health, which negatively affects individuals, families and communities.
The Fair Rent Ontario coalition is asking for individual signatures to their campaign petition as well as organizations to endorse their demands.
For more information about many next steps that are needed to change the trends seen in this report, and solve the rental housing crisis are further clearly outlined in major reports from community partners, federally and provincially:
Canadian Centre for Policy Alternatives: Rent control in Ontario: The facts, the flaws, the fixes
Canadian Housing Evidence Collaborative: Solutions for the Housing Crisis – CHEC-CCRL
Toward a Sustainable Housing System in Hamilton: Framing the Issues: Steve Pomeroy – General Issues Committee – March 9, 2023