You now have to make more than double minimum wage to afford rent in Toronto
While it’s well-known that hardly anyone who wants to settle down in Toronto will ever be able to afford to buy a home here, the ever-increasing cost of living in the city has meant that a large chunk of its residents can’t actually afford to rent here, either.
A disruptive new report has revealed exactly how much people need to earn to pay for a roof over their head in TO, and it’s not just far above the minimum wage, but multiple times that figure.
Can’t afford the rent in #Toronto. Rental wage vs minimum wage. @ccpa #canlab pic.twitter.com/GxSMkanCxm
ā @policyalternatives (@ccpa) July 18, 2023
While the lowest earners in the city are getting the provincial minimum of $15.50 per hour (plus tips for the lucky ones in hospitality), theĀ Canadian Centre for Policy Alternatives has found that a person would need to make more than double that ā $33.60 an hour ā to afford the rent for a one-bedroom apartment, or $40 for a two-bedroom.
This is more than not just those in entry-level, hourly-paid jobs are receiving, but more than many of us are if we were to break down our salaries for roles with seemingly impressive titles that necessitated years of schooling and experience. (It would equate to aroundĀ $70,000 per year for a one-bedroom, or more than $80,000 for two.)
We need regulations that will have the wages constantly match inflation, and force companies to do it.
We also need to cap Rent and Interest Rates.
ā Anti-Fascist Nephalem (@Nephalem2002) July 18, 2023
It is noteworthy that this figure is assuming that one works a standard 40-hour week and is spending no more than 30% of their pre-tax income on housing, which is a common benchmark of affordability.
Unfortunately, that 30% figure is far from the reality in Toronto, where the average person’s rent costs are now more than 100% of their earnings and even two full-time minimum wage workers can’t afford a single-bedroom unit without spendingĀ more than 30% of their combined income.
“The discrepancy between the rental wage and the minimum wage is such that, in most Canadian cities, minimum-wage earners are extremely unlikely to escape core housing need. They are likely spending too much on rent, living in units that are too small, or, in many cases, both,” it reads.
What is even worse is that this analysis was based on 2022 data, which does not account for more recent inflation and interest rate hikes that have translated to even higher rent prices.
More people than ever are renting in Canada as dreams of homeownership die https://t.co/CnKH5KnEwF #Canada #RealEstate
ā blogTO (@blogTO) December 7, 2022
Minimum wage across Ontario is set to increase to $16.55 in October, almost matching the federal minimum wage implemented in April, but people in even slightly higher-paying hourly or salariedĀ positions are not seeing their pay bumped to amount to a living wage to keep up with the exorbitant expenses that come with the city.
Toronto is the second-most unaffordable locale in Canada, according to the report, beaten out only by Vancouver and followed by Kelowna, Victoria and Ottawa, though “the rental wage is considerably higher than minimum wage in every single province.”
Only three cities had a higher minimum wage than what the experts call a one-bedroom rental wage: Sherbrooke, Trois-Rivieres and Saguenay, Quebec, and rental affordability is getting worse in those places, too.
Huge crisis. Even people wanting to stay in their units are threatened by AGIs, demoviction, renoviction, relaviction (for “family use”). Moving almost always = huge increase in rent ’cause no control on vacant units. Our rent doubled after 2 forced moves.
ā Marta O’Brien (@archhistory) June 20, 2023
As far as solutions, the think tank suggests, of course, higher pay and less rampant wage suppression policies, more rental housing supply, and a better-regulated market that does not “privilege profit-making over housing security and allow the use of rental accommodation as an asset class.”
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