Vital Signs 2015

Rental Housing

How has Hamilton’s renaissance affected rents?

With its historically more affordable housing costs, Hamilton’s renaissance is exerting substantial pressure on its rental housing market.  In 2015, average rents rose by 4.1% in one year, the highest of any major city in Ontario, and over the past eight years rents have risen by 22%.  Vacancy rates have similarly dropped from a “renter’s market” 4.5% in April 2014 to an unhealthy level of 1.8%.  The rapid decline in the vacancy rate is foreshadowing a looming housing crisis for Hamilton.

Other highlights:

Housing affordability for current renters

One of the clearest signs of Hamilton’s renaissance has been the rising real estate prices across the city, among the best performance of any city in Canada, especially in areas of the lower city where housing values were depressed for many years[1]. This gives a big economic boost to existing homeowners and the real estate industry and construction/renovation industries[2]. For new entrants to the housing ownership market and renters, however, rising real estate values makes it even more difficult to access safe, affordable housing, especially for residents with the lowest incomes.

Almost one-third of Hamilton households rent their dwellings (32%), compared to 22% of Ontarians (chart 10). Toronto has the highest proportion of renters in Ontario at 45%.

Chart 10. Proportion of renters among all households, City of Hamilton and selected communities, 2011

Chart 10

Data source: Statistics Canada (National Household Survey, 2011)

In 2011, among the communities selected for comparison, housing costs of current occupants are lowest in Hamilton, especially for renters. Renters paid on average $770 a month for their dwellings, compared to an average of $926 for renters across Ontario (chart 11).

Chart 11. Average housing costs for current occupants, by housing tenure, City of Hamilton and selected communities, 2011

Chart 11

Data source: Statistics Canada (National Household Survey, 2011)

The lower rent in Hamilton, however, goes along with lower than average incomes compared to Ontario, so renters in Hamilton have high rates of unaffordable housing. Despite lower rents: 43% of renters in Hamilton are paying more than 30% of their income on rent[3], compared to an average of 42% across Ontario (chart 12).

Chart 12. Proportion of owners and renters paying more than 30% of their income on rent and utilities, City of Hamilton and selected communities, 2011

Chart 12

Data source: Statistics Canada (National Household Survey, 2011)

The proportion of income that goes to rent is highest among residents with the lowest income (chart 13). In Hamilton, the first quartile of renters households by income only earn on average $11,032 per year. This quarter of renters includes people subsisting on social assistance, old age pensions, student loans and/or meager employment income.  On average this group of renters pays $632 per month in rent, which represents 69% of their income, leaving them a very small amount for other basic necessities like food and transportation. People in this group are at highest risk of homelessness if they incur significant new costs such as rent increases or medical costs.

Chart 13. Proportion of renters’ income spent on rent and utilities, by income quarters, City of Hamilton, 2011

Chart 13

Data source: Statistics Canada (National Household Survey, 2011), published by the BC Non-Profit Housing Association and available at

Availability of rental units

Since 2001 (the earliest data available for the city of Hamilton), there has been a 1% net decrease in the number of housing units in Hamilton’s primary rental market[4] (see chart 14). After a rise between 2001 and 2004, there has been a net loss of about 1,070 rental units from the primary rental market in Hamilton (which is a 3% drop between 2004 and 2015).  A major reason is the climb in condo conversions by owners of rental buildings, which has led to the loss of almost 2,000 rental units from Hamilton’s primary rental market[5]. In contrast between 2004 and 2015, there were almost 1,500 new units added to the primary rental market in Kitchener-Waterloo-Cambridge. Developers of purpose-built rental buildings in the Region of Waterloo have focused primarily on the growing student rental market.

Chart 14. Change in number of rental units in the primary rental market (Indexed, 2001 = 100), City of Hamilton and selected communities, 2001-2015

Chart 14

Data source: Canadian Housing and Mortgage Corporation (Housing Market Information Portal – CMHC Rental Market Survey, 2001-2015)

The combination of fewer rental units in Hamilton and a fast growing population of young adults (who are renters in higher proportions than other age groups) is pointing to a looming housing crisis in Hamilton. Since April 2014, the vacancy rate in Hamilton’s primary rental market has dropped from 4.5% to 2.5% in October 2014 and then to 1.8% in April 2015, the same level as the city of Toronto (chart 15). A 3% vacancy rate is considered the minimum for a healthy rental market[6]. The City of Hamilton has now put a moratorium on approval of new applications for conversions of rental buildings to condominiums due to the vacancy rate declining below 2%.

Chart 15. Vacancy rate in the primary rental market, City of Hamilton and selected communities, 2006-2015

Chart 15

Data source: Canadian Housing and Mortgage Corporation (Housing Market Information Portal – CMHC Rental Market Survey)

Current rental market

The low vacancy rates are contributing to a steep rise in the price of rental units. Even before the sharp decline in the vacancy rate, Hamilton’s average rents were increasing at 2.5% per year in the 2007-2014 period, higher than both Waterloo and Toronto (chart 16). In 2015, rents for available apartments in the primary rental market have skyrocketed by 4.1% in one year, the highest among any major city in Ontario.

Chart 16. Change in average rent for units in the primary rental market, City of Hamilton and selected communities, 2007-2015

Chart 16

Data source: Canadian Housing and Mortgage Corporation (Housing Market Information Portal – CMHC Rental Market Survey, 2007-2014)

More detailed data shows that the lowest price units, bachelor and one bedroom apartments are seeing the biggest increase in rents. Chart 17 shows these smaller rental units available for rent in the primary market increased in cost by 28% and 25% respectively between 2007 and 2015. These are the units most likely to be occupied by low-income renters, the very renters who can least afford any increase in their housing costs. Research from McMaster’s Dr. Richard Harris shows that the most vulnerable renters are concentrated in Hamilton’s lower city especially in the east end[7]. These renters are most at risk of homelessness as rents rise and not enough affordable housing is available to help those who don’t earn sufficient income to compete in the private market for housing.

Chart 17. Change in average monthly rent by number of bedrooms, primary rental market, City of Hamilton, 2007-2015

Chart 17

Data source: Canadian Housing and Mortgage Corporation (Housing Market Information Portal – CMHC Rental Market Survey)

The academic predictions about Hamilton’s rental market are quickly turning into reality. Hamilton’s rising rents have already attracted a number of investment companies buying poorly maintained older rental buildings with the goal of improving them and increasing rents[8]. Some landlords are attempting to induce current residents to leave their relatively affordable units by offering a payment to tenants[9]. But with little chance of finding similarly priced units on the current private market, tenants are at a high risk of moving into unsafe, over-crowded housing, or even becoming homeless. The loss of affordable housing in Hamilton is being felt by Hamilton’s only shelter for homeless women. Mary’s Place has seen a large rise its number of clients, and regularly turns away close to 50 women per month[10].

A community developer from Hamilton’s Legal Clinic, Maria Antelo, described the nature of housing as very different from other goods that can be bought and sold:

“Right now, what tenants want is whatever is available to keep (rent) the way it is and prices shouldn’t going up because our city is becoming a bit trendy.  At the same time there has to be a balance. Tenants understand that we do want beautification in our city, we do want investment in our city but we want politicians, developers to understand housing is a basic need, it’s not a luxury.[11]

Social Housing

Affordable housing has long been one of Hamilton’s advantages and keys to quality of life. But with Hamilton’s increasing economic prosperity, rising rents and housing prices have increased the need for non-market housing options to help bridge the gap caused by low wages and precarious employment.

However, investments in social housing repairs are not meeting the need to keep units in an acceptable level of maintenance, forcing some units to be kept vacant. The City of Hamilton owns about half of the social housing units in Hamilton. The City currently spends about $15 million per year on repairs, less than 40% of what is needed (chart 18).

Chart 18. Spending on repairs to City Housing Hamilton social housing units, 2015

Chart 18

Data source: City of Hamilton, General Manager, Finance and Corporate Services, Mike Zegarac as quoted in Citizens at City Hall (CATCH) report on General Issues Committee of Council (January 15 2015).

Hamilton’s social housing waitlist has had a net increase since 2006, to now 2.5% of the city’s households on the waitlist, compared to 6.9% in Toronto (increasing more rapidly due to higher rents) and 1.3% in Waterloo (declining) (chart 19).

Chart 19. Social Housing waitlists and units, City of Hamilton and selected communities, 2005-2013

Chart 19

Data sources: Ontario Non-Profit Housing Association (2015 Waiting Lists Survey) and Statistics Canada (2011 Census)

[1] MacLeod, M. (2015, April 24). Bidding Wars: Just how hot can Hamilton’s housing market get? Realtors seeing bidding wars erupt in inner-city neighbourhoods that have traditionally been considered a hard sell and less than fashionable. Hamilton Spectator:

[2] Contrary to popular belief, Hamilton’s municipal budget does not benefit tremendously from increasing property values. Provincial legislation regulating municipal property tax does not allow for average increases in property values to lead to increases in overall municipal tax revenues, unlike the system for federal and provincial taxes (whereby the federal and provincial governments tax revenue rise automatically with increasing incomes). For more details, see Hains, D. (2014 January 9). Everything you ever wanted to know about property taxes. Torontoist:

[3] Canada Mortgage and Housing Corporation and financial institutions define affordable housing to be housing costs less than 30% of a household’s income. Housing costs for renters include rent and utilities and for owners include mortgage payments, property taxes, condominium fees, and utilities.

[4] In Hamilton, about 54% of Hamilton’s rental units are in the primary rental market, which only includes purpose-built rental buildings with three units or more. An additional 28% of Hamilton’s rental units are in the secondary market, units in smaller buildings, or condo units rented out for example. About 18% of Hamilton’s rental units are non-market, that is to say social housing and other housing subsidy programs. (Calculations based on 2011 NHS and CMHC data.)

[5] In Hamilton, the experience has been that a significant proportion of condos remain as rental units, as many owners buy condo units as investment properties. However, as there is no longer one landlord for a building, these rental units are then classified in the secondary rental market. The numerous unit owners in a building can also make it harder for tenants to organize and advocate for building improvements since they may all have different landlords.

[6] Wellesley Institute. (2010). Painfully Low Vacancy Rates, Shrinking Number Of Homes: New National Report Underlines Rental Housing Woes Across Canada

[7] Harris R. et al. (2015). A City on the Cusp: Neighbourhood Change in Hamilton since 1970. Cities Centre, University of Toronto: Research Paper 236:

[8] Arnold, S. (2015 September 4). East-end Hamilton apartment blocks sell for $51 million. Hamilton Spectator:

[9] CBC Hamilton. (2015 February 20) Downtown apartment tenants ‘don’t want to leave’ amid rent hikes, renos:

[10] Gage, A., Pike, D. and Mayo S. (2015). Women’s Housing Planning Collaborative (WHPC):  Emergency Planning For Services For Single Women Experiencing Homelessness. Social Planning and Research Council of Hamilton:

[11] CBC Hamilton. (2015 July 29). Hamilton tenants rally against gentrification: