February 23, 2022
Kingston’s vacancy rate decreased to 1.4 per cent in 2021. This tightening in the rental housing market follows a reported record-low of 0.6 per cent in 2018, increasing to 1.9 per cent in 2019, and further to 3.2 per cent in 2020. Rental housing vacancy rates are reported annually by the Canada Mortgage and Housing Corporation (CMHC).
The 10-Year Municipal Housing and Homelessness Plan establishes an objective to maintain a vacancy rate of 3 per cent, which is considered to be the vacancy level that supports rental price stability.
Last year’s reported decline in the vacancy rate follows on recently released census data indicating Kingston’s population grew by 7 per cent from 2016 to 2021. This influx of new residents driven by people moving to Kingston from other Ontario cities and from other countries has a direct impact on the demand for housing.
“The pressure on our housing market is significant and increasing rents continue to be a challenge in our community,” says Mayor Paterson. “In 2021, Council endorsed a variety of housing initiatives intended to support housing stability and affordability in our community. In 2022, we will continue to support the development of new housing and explore strategies to create additional affordable housing supply. This is a top priority, and we know there is still a lot of work to do.”
What this means
Kingston’s current vacancy rate reflects the percentage of purpose-built rental housing units available in the housing market at a point in time. Over the past 10 years, Kingston’s vacancy rate has averaged 1.9 per cent. Kingston’s reported 1.4 per cent vacancy rate is lower than the provincial average which was reported to be 3.4 per cent.
Highlight commentary from the 2021 Rental Market Report for the Kingston region includes:
- The average rent for a one-bedroom unit increased to $1,178 in 2021, up from $1,145 in 2020.
- The overall average rent paid by renters increased by 3.5 per cent from 2020 levels while average rents increased across Ontario by 2.8 per cent.
- At 1.4 per cent, the Kingston vacancy rate was the second lowest among Ontario’s census metropolitan areas.
- Factors contributing to the increased demand for rental housing in 2021 included improved labour market conditions, the return of post-secondary students, new residents moving to Kingston from other areas, and the increasing cost of entering the home ownership market.
It is important to note that only multi-residential buildings with three or more units are counted in CMHC’s primary vacancy rate calculations so that certain rented dwellings, considered part of a secondary rental market, do not figure into the data. The secondary rental market includes dwellings such as duplexes, houses, condos, one or two apartments attached to commercial space and secondary suites.
“The City’s support for affordable housing is demonstrated by the numbers” says CAO Lanie Hurdle. “Currently, there are approximately 250 new affordable housing units under development that have been allocated a total of approximately $40 million in capital funding assistance from the three levels of government.”
New housing construction remains strong
In 2021, the City issued building permits for 1,110 new residential units of which 705 units are multi-unit apartment dwellings. In addition, last year, the City issued building permits for 98 secondary suites which continue to provide an important supply of new rental housing. In 2020, building permits were issued for 1,290 residential units. New construction is necessary to meet the housing demand of the City’s growing population.