Alex Rettie leases a two-bedroom unit on the main floor of a bungalow in Kingsland, an established neighbourhood in Calgary’s south. Although his rent remains below market, he’s already spending more than half of his monthly income in housing costs.LEAH HENNEL /The Globe and Mail
In the face of exorbitant rent increases, some Calgary tenants are opting to move back with their parents while they save up for a down payment.
In November, Paxton Porter and his fiancée found out the rental rate for the two-bedroom apartment they’d been leasing since 2020, would be going up by 83 per cent. “In Alberta there are no restrictions on how much a landlord can increase rents,” Mr. Porter says. “So it’s totally up to them; the only thing they have to do is give you notice.”
The increase came after the 1973-build walk-up in Sunnyside, a trendy neighbourhood in Calgary’s inner city, changed ownership last summer. The new landlord “essentially hit everybody with rental increase notices,” Mr. Porter says.
Because Mr. Porter’s partner would be leaving Calgary for school, the rent hike meant he’d be spending more than a third of his income in rent.
“I was on my own,” Mr. Porter says. “And I said, ‘Well, I don’t need all this space anyway, and the rent is going up an insane amount, so let me just move back to my parents’ to save money so I can buy a place.’”
Moving back to his parents’ home in Calgary’s deep south, however, wasn’t ideal. “I didn’t want to move back to my parents’ at the beginning,” Mr. Porter says. “But I did look at the [rental] market, and the market was very bad.”
In the past five years, the average rental rate in Calgary has risen by 33 per cent, according to CMHC data, reaching $1,583 last October. This increase has been largely caused by an unprecedented influx of new residents to Alberta’s largest city, who’ve driven up demand for rental housing. Between 2022 and 2023, Calgary’s vacancy rate dropped from 2.6 to 1.4 per cent, and CMHC expects it to bottom at 1 per cent by 2025.
Moreover, asking rents for new leases have jumped by nearly 43 per cent since 2019. As a result, moving to a more affordable place is an unlikely alternative for Calgary’s 56,695 renter households already spending a third or more of their income in rent.
A case in point is Alex Rettie, a Calgary tenant leasing a two-bedroom unit on the main floor of a bungalow in Kingsland, an established neighbourhood in Calgary’s south. Although his rent remains below market, he’s already spending more than half of his monthly income in housing costs.
“When I first moved in, rent was $1,500,” he says, noting that this amount included utilities. “It went up to $1,650 two years ago. But then [my landlord] had to renegotiate their mortgage when interest rates had gone up.”
As Mr. Rettie’s lease comes up for renewal in June, he worries a move might be imminent, if his rent increases further. But finding a more affordable place won’t be easy.
Currently, the average listed rate for one-bedroom rentals in Calgary is $1,711. “I can’t think of the last time I had enough money for first and last month’s rent,” Mr. Rettie says. “That’s a big whack of money to me.”
Since the federal government launched Canada’s National Housing Strategy in 2017, the programs created have focused on addressing the needs of young prospective buyers such as Mr. Porter, but less has been done to support renters who, like Mr. Rettie, have few options available.
According to Ricardo Tranjan, a senior researcher at the Canadian Centre for Policy Alternatives, existing federal programs, such as the Canada Housing Benefit and the first-time home buyer incentive, leave out about 70 per cent of Canadians who are neither prospective home buyers nor very-low-income tenants. “Their income level suggests they will not be buying a house any time soon,” he says. “But they earn too much to qualify for any benefit.”
The creation of a Renters’ Bill of Rights, announced by Prime Minister Justin Trudeau in late March, signals a shift away from prospective homeowners – but the devil is in the details.
To significantly improve the livelihoods of Canada’s renters, the Bill of Rights should create a minimum set of standards for all provinces to follow, just like consumer rights or bargaining rights for workers, Mr. Tranjan explains. “You could definitely have a big impact in provinces that have few protections, like Alberta.”
Without strong policies to level off the power disparity between landlords and tenants, rent will continue to eat first in Alberta. As the province’s population continues to surge, landlords are finding themselves in a position that allows them to increase their profit for as much as the market will bear. Despite the completion of 3,681 rental units in 2023, CMHC estimates that the average rental rate for a two-bedroom unit in Calgary will go up by nearly 10 per cent this year.
“Rent hikes can be directly related to one of two aspects,” Mr. Tranjan says. “They can be related to actual increases in cost the landlord is passing on to the tenant, to ensure that profit margins remain the same; or it can be simply related to what landlords can get, and increase profit margins.”
To help mitigate the challenges created by rising housing costs in a province where the yearly magnitude of rent increases is not regulated, the Alberta government runs two rent assistance programs that provide eligible tenants with both long- and short-term relief. In Calgary, these programs are administered by the Calgary Housing Company (CHC), a wholly owned subsidiary of the City of Calgary, and while 2,800 Calgary households currently receive one of these two benefits, the wait-list to access community housing and rent assistance reached 6,700 households in February.
“The criteria for receiving rental assistance … are based on level of need and are not first-come first-served,” says Darren Nimegeers, communications lead at CHC. “Criteria include factors such as risk of homelessness, number of children, family violence, etc.”
To compound the issue, because the median income of renter households in Calgary is $66,000, few qualify to receive rent assistance.
This situation has an important impact on the long-term well-being of tenants, in Calgary and elsewhere.
When faced with a significant crunch, renters try to increase their income by taking more work, or to reduce their costs by cutting discretionary spending or taking on a roommate.
More importantly, when renters spend more than a third of their income in rent, saving up to afford more stable living conditions becomes impossible, says Elisabeth Gugle, an associate professor of family economics at the University of Victoria.
“We live in a country where we have structured living space in a way where home ownership is where you need to go – and more and more people feel like they cannot achieve that any more.”
Indeed, RBC estimates that nearly 1.9 million new households in Canada will be priced out of home ownership by 2030.
As the chasm between the aspirations of Canadians and reality grows, the mental health of tenants is dwindling, as evidenced in a recent survey – but it doesn’t have to be this way.
“There are other countries that have much higher levels of renters, and they are happy,” Ms. Gugle says. In Austria, the abundance of social housing takes the pressure off tenants and gives them certainty, whereas in Canada, she adds, “not knowing whether you can live in a decent place, or how long you can afford it, is very challenging.”
If affordability conditions don’t improve, RBC suggests Canada expand the country’s social housing stock by 57,000 units each year, over the next six years, to meet the needs of those priced out of the market.
“If you look at social housing projects in Vienna, they are amazing places for people to live in,” Ms. Gugle says. “People are proud to live in them because there’s a range of people who can actually qualify to live there.”