Financial firms in Toronto pursue evictions more often than any other type of landlord in the city, a groundbreaking new study has found.
These landlords — which include publicly listed real estate companies, real estate investment trusts (REITs), and asset managers — file eviction applications for about 11 per cent of their tenant households in any given year, a rate 1.5 times higher than that of corporate chains, 2.5 times higher than single-building owners and 2.7 times higher than in public housing, the study said.
The study by University of Waterloo and University of Toronto researchers, published in the journal “Urban Geography,” examined more than 232,000 eviction applications in Toronto from 2010 to 2019 across purpose-built rental apartments with 20 or more units.
“This data has not existed in this form before,” said Martine August, a professor of planning in Waterloo’s faculty of environment.
She said the study was a five-year undertaking, noting past research has largely been on a neighbourhood scale. “This is building by building. We’re quite sure what’s going on with each property and who the landlord is and (when) it’s changed hands.”
The study found financial landlords were the most aggressive in filing for eviction after purchasing a property and in properties in marginalized neighbourhoods.
After purchasing buildings, financial landlords nearly tripled the rate of eviction applications of previous owners.
Applications rose dramatically when the firms bought properties from smaller-scale owners, increasing nearly six-fold when purchasing from single owners.
While the study found all private landlords had more eviction filings in marginalized communities — at roughly twice the rate in lower-income areas of the city compared to wealthier areas — this was especially true for financial firms.
“We suggest that the structure of financial firms, which treat housing as an investment product and prioritize profit maximization for investors, compels firms to more aggressively manage their properties, and to more aggressively file eviction notices to drive revenues through rent increases on vacated units,” the study concluded.
This finding “demolishes” the argument that “delinquent tenants” are the problem, August said.
“We look at buildings that changed hands, so it’s the exact same tenants,” she said. “The previous landlords are going ahead, making money fine with fewer eviction filings, and then when these financial firms take over, they increase the filings from the exact same property and the exact same tenant base. This shows that it’s (the landlord’s) behaviour.”
The study listed several examples of financial landlords applying for more evictions after purchasing properties. In one case, investment company Akelius Canada purchased a Parkdale building where the previous owner had filed three eviction notices over four years. After its 2013 purchase, Akelius filed 63 eviction applications, representing a 1,209 per cent increase, the study said. The company raised rents by hundreds of dollars per month on vacant units, with price increases of up to 90 per cent.
Cheng Yuan Rong, the head of the Toronto portfolio at Akelius, told the Star in a statement its business model is to provide better living for all tenants and that tenants can stay as long as they want in their apartments.
“It is not true that Akelius drives out existing tenants as part of the business strategy,” Rong said. “Akelius always follows the rules and regulations regarding rent increases and all other matters.”
The study found social and non-market housing had the lowest eviction filing rates and did not have higher rates in racially marginalized communities — a surprise to August given they have more vulnerable, low-income tenants.
Landlords who treat housing as a social good rather than a market commodity are more likely to protect tenants from the more “aggressive and predatory practices” of private firms, August said.
Throughout the study timeframe, large-scale owners — mostly financial firms — purchased 86 per cent of units sold, which August said is a “huge cause for concern.”
August’s past research has found financial firms in Toronto are the most aggressive in raising rents and the new study, she said, reveals more patterns of financial firms making profits at the expense of regular people.
The study calls for greater tenant protections and policy to “rein in” the power of financial landlords.
Vacancy control — which limits how much landlords can hike rents when a unit is vacated — was repealed in Ontario in 1997, and bringing it back would be part of the solution, August said.
Researchers also called for regulations that limit or prevent housing ownership for financial firms (August noted Berliners voted in a nonbinding referendum in 2021 to expropriate property from private real estate investment companies), eliminate their federal and provincial subsidies, and remove their access to low-cost federal government financing.
The study also called for expanded federal and provincial funding for non-market housing.
