The rebirth of purpose-built rental in Toronto: an exploration of causes and consequences

Purpose-built rental is an integral part of Canada’s housing system because it provides long-term, stable housing to those who cannot afford to own a home or who choose to rent. After two decades of extremely low activity in the sector, Toronto is seeing a marked increase in purpose-built rental construction. This exploratory study uses expert interviews to identify possible factors influencing the current trend, and draws on these findings to provide recommendations on how to support purpose-built rental. The analysis reveals that today’s rental construction is driven by different actors than in the past, namely large-scale institutional investors. These investors represent a novel type of landlord that has not been well studied in the literature, and as such, common assumptions may no longer hold with regard to landlord perspectives on topics such as rent control, necessary profit margins, and housing typologies.

Key words: purpose-built rental, Toronto, finance, housing affordability