Sarah Carder started 2020 much like she had the previous year: running a home-based salon and working part-time at a Barrie restaurant while raising her three children in a shared-custody arrangement with her ex-husband.
”Then COVID hit,” said Carder, 37, who quickly pivoted, making lemonade out of the lemons life had recently served her by fulfilling a life-long dream. ”I decided to go back to school.”
Now she’s working full-time on her honours bachelor degree in counselling psychology through Georgian College’s degree program and running her salon part-time, surviving largely on student loans.
She knew going back to school meant making sacrifices, but there’s one particular challenge that is slowing her down and may well leave her behind the eight ball for a long time: housing.
A low rental vacancy rate for Barrie and much of Simcoe County means there’s competition for the limited number of apartments, duplexes and houses that do become available for rent. Add to that an identified increased influx from Toronto into Simcoe County’s housing market and the demand is stiff.
While that all means good news for those who own and are selling homes here, that translates into bad news for tenants.
Carder came to Barrie from Owen Sound with her husband nine years ago so he could finish school. The couple later split up and have 50-50 shared time with their three children and she has remained in the townhouse they were renting.
But after seven years, the landlord decided to cash in on the lucrative housing market and sell the place.
Rent control has meant that as long as Carder remained in the house, rent could only be raised incrementally every year. Now that she has to hit the market all over again she’s finding ”ridiculously high rents” far in excess of what she has been paying and what she’s budgeted for.
She fears a monthly rent increase of $500 will force her to reduce her course load to 60 per cent so that she can pick up more work to cover those additional costs. That, in turn, would add one or two years to the four-year program.
Once all that is done she’ll have to deal with about $50,000 in student loans before she can even look at buying a home herself.
And given the ever-escalating value of houses in Barrie, she doesn’t know if she’s no longer sure she has any hope of getting into the market.
Rob Hilton has seen various twists of the same story repeat itself this year.
Hilton manages rental properties in Innisfil, Barrie, Orillia and Midland for A.G. Secure Property Management, which has more than 700 low-density residential rentals across Simcoe County consisting mostly of buildings with four units or less.
”We’re all experiencing the same thing around here,” he said referring to his two partners working in other parts of the county. ”This year, we haven’t seen a slowdown. From COVID through, it’s just continued.”
Typically, the busy season for single family home rentals ends around the middle of August, when people are settling in for the new school year and demand drops off for the winter.
Hilton’s message is usually if it’s vacant in December, there’s a good chance it will be vacant right into March.
That’s not at all the case this year.
A number of factors that he believes are mostly related to the pandemic has resulted in the ongoing movement of people and the market activity.
Hilton points to a migration of people moving from Toronto’s condo and apartment world into this area not just to buy houses but also to rent. A full house in Barrie is cheaper to rent than a two-bedroom condo in Toronto. And that’s become an attractive option as the office work world has shifted noticeably to home working spaces since the start of the pandemic.
He’s also seeing more family separations, where at least one of the parties is searching for a new place to live.
Another factor he’s noticed is people who were on the verge of buying are now no longer in a position to buy because they’ve lost work or no longer have the job security they had before COVID-19 entered our world. Their ability to buy has also been compromised by rising real estate values and a more stringent mortgage stress test.
At the same time, smaller apartments, such as those with just one bedroom and no balcony, have become difficult to rent.
”People are really, really afraid right now of another lockdown, and if they don’t have somewhere outside to go on their property, they’re scared of that,” said Hilton.
He also believes there is less movement among those who already have apartments here. Half his business right now, he said, is new inventory. Meaning people aren’t moving out of most of the units he manages. By staying in one place, tenants are protected by rent control and can avoid big jumps in rental costs.
The increasing market value of rentals outstrips any year-over-year increases landlords are permitted to add to rental costs through rent control.
By way of example, Hilton said a family renting a three-bedroom home in this area in 2015 would reasonably pay $1,400 per month back then. Over the course of the last five years those tenants, would have seen a total increase in the area of $100 if they remained in the unit. But if the unit were to go on the market now, it could be rented out for $1,900.
The pandemic has revealed yet another oddity for Hilton.
”We are 11 per cent better on rent collection during COVID,” he said, adding that he and his colleagues communicated with tenants, helping to connect them with government programs and other resources, but he believes Canada Emergency Response Benefit (CERB) helped in a big way to keep people in their homes.
According to Canada Mortgage and Housing Corporation (CMHC), there was a slight upward trend in Barrie-area vacancies in 2019, climbing to 3.2 per cent from 2.9 per cent in 2018, 2.7 in 2017, 2.2 in 2016, all up from 1.3 per cent in 2015, far outstripping the area’s growth rate.
Between 2016 and 2019, the total available number of units rose from 3,598 to 3,712.
The average annual rental increase nearly reached five per cent in 2017, but dropped somewhat to four per cent in 2019.
That trend is definitely not continuing into 2020 from where Hilton sits.
Hilton is not seeing the rental market reflect increasing vacancies this year.
”The availability is not there,” he said, adding that those numbers don’t capture the vast majority of rentals in Barrie, which are now substantially duplexed home and house rentals. ”They’re taking a sample and it’s a sample of very old properties, not new inventory at all.”
The CMHC confirmed its numbers are based on purpose-built structures, like apartment buildings. It estimates that purpose-built structures represent 20 to 25 per cent of the units being rented in Barrie. That means most people here rent condos and apartments in low-rise buildings, like those created in houses or duplexes.
In Barrie, Hilton has been renting out one-bedroom units from $1,100 to $1,300, two bedrooms at $1,400 to $1,700, three-bedroom apartments are going from $1,800 to $2,000, three-bedroom townhouses which rented for $1,400 four years ago, now start at $1,800 and a high-end estate property is renting for $2,950.
In Orillia, that townhouse will be $50 to $100 cheaper than in Barrie.
There are other hot spots in Simcoe County which command higher rents, including Friday Harbour in Innisfil as well as Collingwood, although all the local markets are strong with rental properties being snapped up within seven days of being listed, he said.
A recent two-bedroom legal basement apartment listed in Orillia for $1,200 attracted 3,000 views in 24 hours and was rented in five days, he added. The previous tenant in that unit was paying $870.
And he doesn’t think the pandemic’s impact on the market will revert back any time soon.
”There’s no reason to believe this is going to let down at this point, as long as people continue the exodus out of Toronto. Young families can’t afford to buy in Toronto, young families can’t afford the rent in Toronto. As long as remote working possibilities are going to continue to exist, areas such as Barrie are going to continue to be prime” because it’s close enough for a day trip, he said.
”Geographically, Barrie just finds itself in a sweet spot.”
Carder’s situation is also not unique. Hilton pointed out when rental stock, like Carder’s house, is pulled off the market it just disappears, it isn’t replaced.
But there is some indication that the private sector is seeing opportunities with a number of new projects in the planning stages.
Michelle Banfield, the City of Barrie’s director of development services, said there are several development projects close to getting approval that would add to the city’s rental stock.
”Timing for proposed developments varies, but many of the projects are going into detailed site-plan stage, so construction could start in 2021 for occupancy within a year or two,” she said via email.
Combined, Banfield estimates they could lead to the creation of anywhere from 2,000 to 3,600 rental units.
- The HIP/YMCA development on the former Barrie Collegiate Dunlop Street site with 600 residential units in three towers along with a new YMCA and a parkette;
- The current YMCA site on Grove Street is slated to have three buildings with 925 residential units;
- An 11-storey apartment building 37 Johnson Street;
- There are currently 1,900 units proposed for the Smart Centres/Greenwin Barrie Inc. project at 51-75 Bradford Street and 20 Checkley Street.
In addition, there are currently other projects under construction with residential units planned that will provide additional rental capacity.
Until those buildings are up and running, however, renters can expect to be challenged.
While the CMHC analysis for the rental market for 2020 won’t be released until January, CMHC senior market analyst Inna Breidburg expects it to show that the pandemic has freed up rental accommodation in larger and higher priced cities like Toronto, with the hiatus on immigration and students attending classes online from their home communities.
But she’s not confident that trend will extend to smaller communities like Barrie.
”It is hard to say what the vacancy rate and rents are going to be here,” she said.