Despite years of strong housing starts low vacancy rate persists in Kingston area as rental housing market tightens across Canada

The Kingston area’s rental housing vacancy rate was measured to be 1.2 per cent in October 2022, down from 1.4 per cent in 2021 (this area includes City of Kingston, Loyalist Township, and the County of Frontenac). The Canada Mortgage and Housing Corporation (CMHC) surveys the rental housing market annually and notes the decline reported for 2022 is not statistically significant, meaning the vacancy rate is statistically the same as it was in 2021. A healthy vacancy rate that supports supply and demand pressures is typically understood to be 3 per cent.  

Kingston’s vacancy rate is reported to be the second lowest in the province following Peterborough, with low vacancy rate conditions being felt across the country. The CMHC report showed the national vacancy rate for purpose-built apartments fell to 1.9 per cent in 2022 from 3.1 per cent the previous year, the lowest vacancy rate since 2001. CMHC attributes the tightening in the rental housing market in part to increased immigration, the return to on-campus post-secondary learning, and the increasing financial cost of transitioning from the rental market to ownership housing.  

“The rental vacancy rate is reflective of the overall housing crisis that is being felt locally, provincially and nationally, where the supply of housing does not meet the demand and where the cost of buying or renting housing is has increased beyond what is considered affordable for most Canadians,” says Paige Agnew, Commissioner, Community Services. “The housing crisis is a complex issue that has touched all residents, with the greatest impact on those who are most vulnerable. It is an issue that permeates throughout every facet of society and requires all levels of government, private corporations, non-profits, institutions, skilled workers and private citizens to work together to increase the overall supply of housing and help decrease the costs. We’ve done amazing work creating new housing as a city over the past five years, but we need to keep going.”  

The City of Kingston focused on increasing housing affordability as one of the main strategic priorities from the 2018-2022 term of Council. Significant forward progress was made over the past four years in increasing the overall supply of housing, with a specific focus on providing affordable housing as per the City’s 10-Year Municipal Housing and Homelessness Plan. In 2019, the Mayor’s Task Force on Housing released a Final Report providing direction to support the development of new market and affordable housing units. The recommendations of the Task Force resulted in a number of positive, housing-supportive initiatives, with staff addressing 88% of the recommendations by November 2022. 

From 2018 to 2022, 5009 new residential units have gone to construction in Kingston, representing a 61% increase in housing starts compared against the 3104 units built between 2013 and 2017. The number of building permits issued on a yearly basis between 2018 and 2022 was higher than ever before in the City, with 873 building permits for new dwelling units to be constructed and 426 occupancy permits for completed dwelling units issued in 2022. A total of 77 new affordable housing units or beds in congregate, transitional housing facilities were occupied in 2022 and were made possible through financial support from all three levels of government.  

The 2022 CMHC Rental Market Report notes despite adding approximately 405 new purpose-built rental housing units, demand continued to outpace supply. Rental housing demand was supported by factors such as the recovery of employment and the return of post-secondary students to in-class learning in 2022 following the earlier impacts of the pandemic. In addition, permanent population growth resulting from new residents moving to the Kingston area supported demand for rental housing. 

“With the demand for housing continuing to surge here in our community, it’s critical we expand the supply of rental housing to keep pace,” says Mayor Paterson. “Housing continues to be a top priority for City Council and we will continue to do what we can to support the creation of new units of every type across the city. We look forward to working with our housing partners, in both the private and non-profit sectors, to build new housing to accommodate existing residents and our growing population.” 

A low vacancy rate is typically associated with increased rents. The average rent for a two-bedroom apartment was up 4.9 per cent in 2022 to $1,471. This was driven in part by landlords asking for increased rent at the time of unit turnover. On average, the new rent cost was 21.6 per cent higher than a unit that didn’t turnover in the same building. Of note, in Kingston the CMHC survey only includes purpose-built rental buildings with three or more units and excludes the secondary rental market which includes rental units such as duplexes, single- and semi-detached houses, condos, and secondary suites.  

Reports to Council are being prepared that will provide further statistics and analysis of the local housing market, along with the Municipal Housing Pledge in response to the Province’s request that the City of Kingston meet their 2031 Municipal Housing Target of 8,000 new homes by 2031.