Over the years, there has been no shortage of coverage in the media around what it costs to Live in Vancouver. Some use annual rental market reports by the Canada Mortgage and Housing Corporation, others base their data on monthly reports by housing classified sites Padmapper and Rentals.ca. Few, if any, report positive changes in the cost of living. Many of us, perhaps most, still hop on Craigslist to look for a place to rent, at least to begin our hunt. If the asking rents you find there do not quite line up with what you heard, there are a few reasons for that.
Craigslist is still one of the single largest platforms for offering and finding rental housing yet the ocean of ads does not inform the reports we hear. Unless an ad is cross-posted on Padmapper or Rentals.ca, both competitors to Craigslist, they cannot report it. Nor is it a simple matter to compile these ads. Due to Craigslist’s flexible standards for an ad, the data is messy and requires a great degree of cleanup.
Several questions stand: If one is willing to clean up the data, what might Craigslist say about the rental realities of Metro Vancouver, or any other city? Exactly how high is rent and how does that break down across the region? Do the rents on Craigslist differ from other reports? If so, how and why?
The Housing Research Collaborative (HRC) at UBC undertook study to investigate these questions late last year. Details are in the full report which focuses on the last five months of pre-COVID Vancouver. It is best to take it as supplementary information to other sources and with a grain of salt. Despite its size, Craigslist is not the whole rental universe. At most, it is a dominant part of the market for new rents and does not say much about existing leases. Based on over 17,000 ads, it does show some sides of Metro Vancouver not obvious in other reports.
Affordability
Let us start with the affordability question on everyone’s mind and set a benchmark for what is affordable. Take a household making the regional median income for renting households – as surveyed in 2017 by the CMHC and adjusted to $61,146/yr in 2019 dollars – as our model scenario. This model median renter household consists of two income-earning adults, based on the average regional household size of 2.2 and covers scenarios of roommates or couples with or without one dependent. The popular threshold of housing unaffordability is when a household spends more than 30% of its before-tax monthly income on rent: $1,529 monthly rent in this case.
This household is likely overspending on renting a two-bedroom unit anywhere west of Surrey and Pitt Meadows (figure 1). Most of the region’s population live where rent is north of 30%, over 50% in trendier Vancouver neighbourhoods outside of the downtown peninsula, over 65% within. Even some parts of Langley exhibited median two-bedroom rents above 30%. Southeast Vancouver is the city’s least unaffordable quarter, showing two-bedroom rents only a few percentage points over the threshold.
If each adult in the model household brings in an equal share of income, how do all opportunities look for one of them willing to share a roof with others? A price-per-bedroom (PPB) was determined for all listings from bachelor to eight-bedroom units. The affordability of each for the model individual renter, with a 30% rent threshold of $764, was plotted on the next map.
The Craigslist market has its Unicorns: several opportunities to spend less than 30% of our model income for a bedroom, even in downtown. The lion’s share – 83% – is not affordable for the regional median-earning renter. Most of these Clusters of unaffordability show up in densifying areas around transit stations and the inclusion of one-bedroom units pushes many of the central areas above 70% of the model monthly income. For clarity, median individual renter income in the City of Vancouver proper, according to the 2016 Census, is considerably higher with a 30% threshold of $1,342 in 2019 dollars, indicating that renters are sorting according to local rents.
PPB can also show us what kind of units are more affordable to rent. Units with more bedrooms predictably rent for more but less per bedroom. Median PPB in a three-bedroom unit comes out to roughly half of a one bedroom unit, showing the savings that come with sharing.
Bedrooms and Supply
So how many of these more affordable opportunities are there? Most reports focus on one and two bedroom units, grouping all units with three or more bedrooms together if counting them at all. The role of these units appears minor, but maybe it is simply not well understood.
The CMHC includes summaries of unit sizes in the “primary” market segment comprising purpose-built rental apartments. In the 2019 report, three or more bedroom units accounted for fewer than four percent versus over 71% of bachelor and one bedroom units. It is not surprising to count so few units with more than two bedrooms in this submarket – they simply are not built in multi-family structures in significant numbers. Such units are much more often found within detached and semi-detached structures. Craigslist, by comparison, includes rentals for these kinds of units and may show how Vancouver’s vast areas of RS-1 and similar zones are accommodating renters.
In five months of ads, the proportions look very different. Three or more bedroom units were represented nearly six times the CMHC proportion. One-bedroom and bachelor units accounted for 41% of the ads, down from 71%. Two-bedroom units also saw a higher representation – the highest – in the ads. Considering that the large “private room” category contains many ads looking to replace a roommate or two in dwellings with more bedrooms, their role may be even more significant.
Counting bedrooms, we can see how many people are potentially housed by each type. The basic fact that a three-bedroom dwelling can house three times as many people as a one bedroom is highlighted. More importantly than the fact that they can is that they likely did so, at about a 9:5 ratio and a lower cost per bedroom.
To be careful, couples sharing bedrooms, children, other dependents, and bedrooms used for other purposes will distort the number of people actually housed in these market transactions. It would be as problematic to presume each bedroom to be occupied by an income-earning adult as it would to expect each dwelling to be rented by a nuclear family.
These are just some of the findings from the full report. This data is showing potential to round out our understanding of the rental situation in Metro Vancouver. There are more questions yet to be answered – or even asked – about inventory, turnover, and emergent events. One of the foremost questions at the end of 2020 is how the current pandemic is affecting the market, and if Craigslist can reveal any trends that may transpire.
Written by Riley Iwamoto