A furnished one-bedroom basement apartment “professionally designed and renovated” in Little Italy is listed for rent for $3,000 per month. A two-bedroom renovated basement suite of a single-family house in High Park: $2,800. Another newly renovated two-bedroom unit near Little Portugal: $2,600.
It’s a sign of the times that shouldn’t surprise anyone for a city in the midst of a housing crisis, says Dania Majid, a staff lawyer at the Advocacy Centre for Tenants Ontario.
“In the past, basement apartments used to be the affordable housing option for students and seniors, but as the demand for housing has increased, especially in Toronto, people have realized it can be quite lucrative to soup up the basement and command a very high price,” she said.
In many cases, basement apartments — with a few cosmetic touches, such as new appliances, better lights or a fresh coat of paint — are now commanding similar or even higher prices than some small condo apartments across the city, she said.
The province’s recently announced Housing Supply Action Plan seeks to remove red tape and make it easier for homeowners to develop their basements into secondary suites. While officials are hopeful that will help address the shortage of affordable housing in Toronto, many of these renovated basements are not affordable at all, Majid said.
With the Progressive Conservatives getting rid of rent control for units that came on the market after last November, landlords can change the rent from year to year on new units, leaving tenants vulnerable to economic evictions, she said.
Geordie Dent, executive director of the Federation of Metro Tenants’ Associations, said that around 2012 the types of housing previously considered lower quality and affordable started to become the “middle-of-the-road option,” according to his group’s databases.
Generally, this is leading to personal-use and renovation evictions, he said.
Under Ontario law, landlords can evict tenants in order to move in a family member or to do renovations. Although the law states the tenant is supposed to get first-right-of-refusal to return at a similar price point after renovations, landlords often neglect to inform them when the property returns to the market. Plus, new rules in the provincial government’s housing plan would allow landlords to charge a higher rent should a previous tenant want to return.
“Landlords are realizing that there’s a very large discrepancy between what a tenant is paying today and what they could be getting on the market across the city,” Dent said.
“If a landlord has a basement apartment they’ve been renting out for $700 a month, and they can legally evict that tenant by claiming they’re moving in or renovating, they can make some minor things like add lights or redo the tiles in the bathroom, and all of a sudden rent it out for $1,800 a month. It’s happening across the board.”
According to a Toronto-based urban planner, the “unhealthy” lack of rental supply bears much of the blame.
“Anything that comes up will create a bidding war,” said Sean Galbraith. “While a $3,000 basement apartment is the most ridiculous thing I’ve ever heard, I’m not surprised.”
He added that as mortgage prices also increase, homeowners will need to take in more money to offset those costs, which could influence a rise in basement prices.
Both Dent and Majid say part of the solution is for governments to invest in the construction of new affordable housing units, as private developers aren’t interested in making housing affordable.
They add that there also needs to be stronger rent control regulations and harsher penalties for landlords who illegally seek to evict tenants to make a higher profit.
“It’s gotten more brazen. Landlords are openly breaking the law in front of everyone’s face, and government is essentially just allowing it to happen,” Dent said.
“The government had thought that basement apartments would become part of the affordable housing stock, but as we continue to see, even basement apartments have now become unaffordable,” added Majid.
“That really is a sign that shows how far we are from solving this crisis.”
Gilbert Ngabo is a breaking news reporter based in Toronto. Follow him on Twitter: @dugilbo