Soaring housing prices hit small town Ontario hard

After night falls, 72-year-old Ann becomes a prisoner in her own apartment, afraid to venture out.

The building and neighbourhood she moved into nearly 30 years ago, with its manicured lawns and colourful tulip beds, has deteriorated. Treacherously broken cement stairs lead to the three-storey brick walk-up’s lobby, where its picture window’s shattered pieces are held together with packing tape.

The window is a lasting reminder of the night last February when a vagrant nearly murdered her grandson, says Ann, who agreed to an interview if we promised not to use her real name. She says gangs run this neighbourhood, and they don’t need much provocation to go after someone.

When her grandson came into the lobby after going out to buy a cup of coffee, Ann says he returned to find a man lying on the floor, bleeding and begging for help. He tried to reassure the man, telling him that he’d called 911, but it only enraged him. Ann says he shouted: “You just called an ambulance for yourself because I’m going to kill you!”

Ann says the man grabbed a large shard of glass and chased her grandson through the building, banging on doors. She could hear the commotion but didn’t dare to open the door. Her grandson ran up to the third floor, she says, and continued knocking on doors until someone let him in.

Ann says she would like to move but simply can’t afford it. A comparable apartment would cost nearly $1,000 more per month than she pays now, and her rent would exceed her fixed income. As it is, Ann spends nearly half her income on housing.

The amount a landlord can increase the rent is based on the Ontario Consumer Price Index, a measure of inflation that reflects the economic conditions over the past year, as calculated by Statistics Canada. During COVID, rent increases were prohibited, and this year, rent on any property that became available before 2018 can only be increased by 1.2 per cent. However, if a tenant moves out, the landlord is free to charge whatever they see fit to the next renter.

Ann’s problem is something you would expect to see in a big southern Ontario city like Toronto, which has the highest housing costs in Canada. But she lives more than 350 kilometres north, in North Bay.

Tricia Marshall, a board member and former president of the Near North Landlords Association in North Bay, says it’s a “perfect storm.” For many years, rental prices were stable; however, after COVID, they shot up dramatically. When people began working from home instead of going into the office, they realized they didn’t have to live in the big city. They could work from anywhere, as long as they had access to the internet.

Newcomers who were willing to pay top dollar quickly filled empty apartments, Marshall says. As well, foreign investors were inclined to spend more money. This new money created more competition. The result is all-over rent hikes.

According to the Canadian Real Estate Association (CREA), housing prices across Canada have risen by 7.4 per cent this past year. In North Bay, home prices have gone up nearly 40 per cent.

Ryan Humble, president of the North Bay Real Estate Board, says rents rose at the same rate as real estate prices. In North Bay, rental rates went from approximately $900 to $1,400 per month for an economy rental and from $1,600 to $2,200 per month for an executive rental.

Diana Mok, an associate professor at Western University, speculates mass migration north contributes to the housing crisis. When the cost of real estate became too high, Torontonians simply got “priced out of the city” and moved to smaller communities that were more affordable.

Housing affordability is a hot issue in the current provincial election race, and proposed solutions factor largely into all parties' platforms. It’s also been the topic du jour at leadership debates. “It is the biggest cost of living crisis that people talk to me about...” Ontario Green Party Leader Mike Schreiner said at a recent public debate in North Bay. The Greens’ platform includes a promise to reinstate rent control and build new affordable homes across the province.

The Progressive Conservatives and Liberals are campaigning on a promise to build up to 1.5 million new homes. The NDP says it will build 250,000 more homes and entice professionals to relocate to northern Ontario communities by offering desirable amenities.

Humble says increasing the population in northern communities could undoubtedly help lighten the citizens' tax load, but he worries about an influx of new residents. "I don't know if bringing more people here is going to make things more affordable because that's going to just increase the demand for housing. And if you don't have enough supply, it's natural that your property prices are going to increase."

During the North Bay debate on May 10, Progressive Conservative Leader Doug Ford said the solution is simple: build more supply and do it quickly. If Ontario waits too long, the price of materials will continue to rise, further boosting prices. Ford promised to cut down on the red tape required to get permits so companies could begin building sooner.

Permits are not a problem in the north, says Dan Degagne, general manager for a home building company that has serviced the North Bay area for nearly 35 years. However, he is concerned about the price and scarcity of building materials, such as electrical panels and plumbing piping. The quality of supplies has also taken a hit; his foreman reports the lumber available would never have even been offered before COVID.

Finding tradespeople to do the work is the second problem with meeting the housing demand. “Our subtrades have their hands full with what we're throwing at them right now,” Degagne says.

General manager of Bay Builders Joe Rogers agrees there are not enough builders in the north to meet the demand. “It doesn't take much of an increase to tap out the capacity of a local market.”

Mok says housing affordability has become an increasingly hot topic in politics over the past couple of decades and speculates that with COVID and the increasing stringency of mortgage stress tests by lenders, people are beginning to notice the trends she and her colleagues have been noting for years.

She worries, however, that the attention on affordability could be fleeting.“My belief is that once the election is over, everything will become business as usual,” Mok says. “It is what it is.”