This is how much you need to make an hour to afford rent in Toronto
By Newinhomes on Jul 22, 2019
If you earn minimum wage, there’s a good chance you can’t afford to rent in any neighbourhood in Toronto, according to a new study by the Canadian Centre for Policy Alternatives.
The purpose of the study was to determine the hourly wage a full-time worker needs to make in order to rent the average two-bedroom apartment using no more than 30% of their income. The study refers to this as “rental wage.” The average rental wage in Canada was $22.40/hour. The average wage required for a one-bedroom apartment in Canada was $20.20/hour.
Vancouver had the highest rental wage at $35.43/hour, and Toronto was the second most expensive with a rental wage of $33.70/hour. To afford a one-bedroom rental in Toronto, you need to make $27.74/hour.
As of October 2018, the minimum wage in Toronto was $14.00/hour. To afford rent for a one-bedroom in Toronto on minimum wage, you need to work 79 hours a week. To afford a two-bedroom apartment in Toronto, a minimum wage worker must work 96 hours a week. There were zero neighbourhoods in Toronto where a minimum wage worker could afford a one- or two-bedroom apartment.
In fact, minimum wage workers can only afford a two-bedroom rental in 3% of the 795 neighbourhoods included in the study. And only 9% of the areas have affordable one-bedroom rentals.
The most expensive area to rent a two-bedroom in Toronto was the Bay Street Corridor, where you need to make $73.17/hour to afford it. Down along the waterfront or in the Toronto Island area, you need to make $53.01/hour to afford a two-bedroom unit.
If you earn minimum wage and want to rent a two-bedroom, you would have to move to Sherbrooke, Trois-Rivieres, or Saguenay. There were also some neighbourhoods in Greater Sudbury and St. Catharines-Niagara where a minimum wage earner could afford a two-bedroom, but there’s a wider selection in the first three.
Of course, there were more neighbourhoods where a minimum wage earner could afford a one-bedroom rental, but it was still way less than half of the total areas included in the study. The only Census Metropolitan Areas where a minimum wage earner could afford a one-bedroom rental in 100% of the neighbourhoods were Sherbrooke and Saguenay.
The study made note of the “collapse” of new purpose-built rental construction back in the 1990s. In the 1970s and 1980s, there were more than 100,000 new rental units built a year, but then federal cuts in the ‘90s bumped that number down to 10,000 units. The lack of supply caused more competition in the rental market and prices went up.
The report concludes with: “Ultimately, there is no substitute for building new dedicated affordable housing, which would cool down rental prices and increase the stock of housing available to the millions of families who choose or who are forced to rent.”
