The Housing Crisis in Montreal: Rising Rents and Limited Options

Reading time: 5 mins

“Montreal, ten years ago, was really a city where the question of material living conditions was less of an issue”remembers Rockya, in her thirties, nostalgic for the Canadian metropolis she knew when she arrived from France in 2009. If the city has lost none of the charm of its brick facades and its spiral staircasesyou can no longer find an apartment there in a week like in “the good times”. A time when its streets were overflowing with artists attracted by a relatively low cost of living, which gave it its “special identity”describes Rockya.

Like many other metropolises around the world, Montreal is now experiencing a housing crisis. “Now it becomes Paris.” In Quebec, nearly three-quarters of cities have to deal with a tight rental market, according to a report by the Institute for Socioeconomic Research and Information (IRIS) entitled “Housing crisis: a rental market in need of supervision” and published at the end of June.

“Rental housing is at the mercy of real estate market dynamics and [de la hausse] interest rates that currently affect the cost of real estate”, explains Julia Posca, of IRIS, co-author of the study. The rent for an average two-bedroom home is expected to rise to 1,120 Canadian dollars (765 euros) in 2023, from 1,022 Canadian dollars (698 euros) in 2022, projects Canada Mortgage and Housing Corporation (CMHC), which represents an average increase of approximately 67 euros.

Either there are no more apartments or the rent is too high

In Montreal, unaffordable rents and the drop in the vacancy rate for rental apartments precede l’inflationresponsible of rising interest rates. These phenomena have nevertheless accelerated since the Covid-19 pandemic, underlines the researcher. In 2022, the vacancy rate in the metropolis stood at 2%, according to data from IRIS. For comparison, vacancy affected 8.5% of the rental stock in Paris in 2021according to INSEE.

Short-term rentals, in particular through the Airbnb platform, also participate in “removing housing from the market and lower vacancy rates”, continues Julia Posca. It notes that the shortage concerns more particularly the “housing whose prices correspond to the income of the tenants”.

While the minimum wage in Quebec is 15.25 Canadian dollars per hour, it would have to be at least 20.30 Canadian dollars, up to forty hours of work per week, to rent a four-room apartment with a bathroom in the metropolitan area of ​​Montreal, reveals a report by the Canadian Center for Policy Alternatives published on July 18.

The supply of social housing is however clearly insufficient, deplores Julia Posca. As of December 31, 2021, more than 37,000 households were on waiting lists for low-rent housing, reports the Société d’habitation du Québec. At the same time, the Montreal Metropolitan Community noted that the share of new social and community housing represented only 2.7% of all new homes built between 2021 and 2022, a rate that has never been so low.

Thus, the researcher points out, “there are people with very low incomes who have to turn to the private market for housing, but who can’t because the rents are too high”.

“The tenant who wants to do that, he must invest in real estate”

If rents continue to rise, it is not for lack of market regulation. But “there are many ways for landlords to circumvent the regulation, particularly surrounding the level of rents”, says the researcher. They may, for example, avoid complying with restrictions on short-term rentals, due to the insufficient number of inspectors to enforce them.

Some do so classification certificates provided by the Corporation de l’industrie touristique du Québec (CITQ), required for rentals of thirty-one days or less, or continue their activity in sectors of the city where accommodation for tourist purposes is not not authorized.

The evictions of tenants also take place within the regulatory framework, allowing landlords to increase the rent without respecting the recommendations of the Administrative Housing Tribunal of Quebec (TAL). Rent increases are four times greater when there is a change of tenant, according to CMHC observations. In a report published in Juneit predicts an average increase of 30% in the greater Montreal area by 2025.

That same month of June, the government of François Legault introduced Bill 31aimed at removing tenants the right to assign their lease. The transfer of his lease to another person has so far helped tenants to limit the effect described by CMHC. This is’“a mechanism that keeps rents at more reasonable levels”defines Julia Posca, and whose repeal risks“exacerbate this tension between housing as an essential good and housing as an investment”.

Strongly criticized, the bill is supported by France-Élaine Duranceau, Minister responsible for Housing. About the lease assignment, she said: “The tenant who wants to do that, he has to invest in real estate and take the risks that go with it.” Accused of contempt and disconnectionthe minister has since apologized.

Navigating troubled waters

In a market where owners are king, there are many abuses. Arrived from Montpellier two years ago to start a license, Juliette Granger, 23, thought she had found the sesame: in shared accommodation with two other people, she paid monthly 466 Canadian dollars without charges, or about 315 euros for accommodation “extremely well located”. But his rent, much cheaper than the market average, came at the cost of repeated negotiations with a landlord “particularly awful”.

When she moves in, he refuses to make her sign a rental contract: he demands a guarantor in Quebec, which is then impossible to find for Juliette. She resigns herself to sub-tenant status depriving her of some of her rights. Today, he refuses to grant them a lease renewal: each roommate must now be able to pay the full rent, or 1,398 Canadian dollars (about 960 euros) without charges. A guarantor is no longer enough. Impossible to find this amount, exorbitant for young students, who therefore took steps with the TAL.

“If it was just me I wouldn’t go to TAL because I’m scared I only have one Status [migratoire] student»says Juliette, grateful to live with Quebecers, without whom she would have had trouble, she admits, understanding how to assert her rights. “When you arrive as an immigrant, clearly there is an adjustment that has to be made. You don’t really know the system, you don’t know how it works. Having a network helps a lot.”adds Rockya.

Certainly, “Immigrants of French origin will perhaps be less disadvantaged than immigrants who come from other regions of the world, because there are discriminatory factors that come into play” and which is reflected in their income, “SO [dans] their ability to accommodate themselvesnotes Julia Posca. “The fact remains that a newcomer is bound to have more difficulty in a market like this, where prices are high.”

Despite her landlord’s hostility, Juliette has no plans to give up this accommodation, aware that her budget leaves her little room for manoeuvre. Of the Montreal dream, shared by 60,000 other French people settled in the metropolisshe could wake up from it: we have to admit that an eviction would push her to reconsider her master’s plans… and to consider a return to Montpellier.