January 6, 2016
First off, Happy 2016 everyone! A surprising number of my clients have asked about the impact the Syrian refugees will have on the Toronto market, and to be honest, I really had no idea until recently. I’ve since researched the subject and decided to turn it into a short blog post:
With Canadians paying close attention to Trudeau’s plan to bring 25,000 refugees to the country over the next few months, many people are asking—where will they live?
The above question, while sounding simple, is multi-pronged. Where they will live needs to be addressed in terms of which city, and with both short- and long-term perspectives.
Where are Canada’s New Refugees Resettling?
Traditionally, Toronto and Montreal have absorbed the brunt of the refugees coming into the country. Since the 1970s Toronto has absorbed about one-third of the country’s immigrants, and this percentage has only increased since then. So the answer of where in the country the (Syrian) refugees will settle, is largely…Toronto—which makes sense given our well-established Syrian and immigrant communities.
Where in Toronto Will our New Refugees Live—Short Term
The Canadian and provincial governments, with help from non-governmental organizations, have come up with plans to immediately house the new Syrian refugees, over the short term. Short-term plans include living with private-sector volunteers, on military bases, churches and in abandoned hospitals. These short-term, gap-filling measures are expected to fill temporary housing needs…ranging from weeks to a few months.
Long-Term Toronto Housing for Refugees
The biggest challenge for new refugees over the relatively long-term is permanent housing. But is there enough affordable housing in Toronto?
Many housing experts forecast that the incoming refugees (which, if we take in just over a third of the 25,000 refugees will be about 10,000) won’t have a noticeable impact to Toronto’s housing market given that there’s a roughly 2-3% vacancy rate for Toronto rentals. Others however don’t agree, especially given the financial situation of refugees.
With only a small settlement fee and a small monthly subsidy (official numbers haven’t been released but are expected to be well under $2,000 per month) their living options will be extremely narrow. Only the most affordable neighbourhoods in Toronto will offer housing within their price range, most notably parts of Etobicoke and North York, Regent Park, Oakridge, Thorncliffe Park, Flemingdon Park, Junction, Scarborough, Parkdale and other neighbourhoods with similarly-affordable rental prices.
The concern by many Canadians however is that refugees may jump the queue for subsidized housing—which in Toronto has a current waiting list of 6.6 years (and almost 80,000 households on the waitlist). Immigration Minister John McCallum however has said fairly emphatically that refugees will not jump any queues.
In my opinion, accommodating another about 2500 rental units in the city (assuming an average family size of four people) won’t affect the market adversely, as the families will be spread out across the city. And in terms of the real estate market I don’t foresee any affect on home ownership.