Rental Row Houses: Suitability and Affordability

Row houses in the purpose-built, or primary, rental market are an important option for larger renter households. Because of their size, rental row units offer more suitable housing for larger households than the most common apartment types. They are also more affordable than row units available for purchase and, in certain cases, those for rent in the secondary rental market.

Purpose-built rental row units: a look at the Ontario market

Our latest Housing Market Insight looks at the evolution of the purpose-built rental row market in Ontario from 1990 to 2018. Incidentally, Ontario is where half of Canada’s purpose-built rental row units are located. We also look specifically at the three census metropolitan areas (CMAs) that have 60% of these Ontario units: Toronto, Ottawa and London. Some highlights:

• The inventory of purpose-built rental row units in Ontario fell significantly in the 1990s. Since then, it has remained at a similar level, but has increased slightly in the last few years.
• The secondary rental market has filled the gap left by declining purpose-built offerings. In Ontario, average rents for rented row condominiums (part of the secondary rental market), were affordable to fewer households than their purpose-built counterparts.
• For larger families, overcrowding was less common in rental row units than in apartments. This suggests that the row units provide accommodation that is more suitable for such households.
• A disproportionate number of households who experienced overcrowding were immigrants. Within this group, overcrowding was less common in rental row units.

A suitable option for larger households

Rental row units were most likely to be occupied by larger households, like couple households with children and lone-parent households. This preference among larger households is likely because, on average, row units offered a higher bedroom count compared to apartment substitutes. As a result, row units were more likely to provide suitable housing.

For couple households with children in Ontario, the share of households living in overcrowded conditions was 45.0% for apartments. In row units, it was a much lower 15.3%. We saw a similar disparity for lone-parent households in Ontario. For this household type, the share living in overcrowded conditions was 37.2% for apartments and 15.8% for row units.

Primary market rental rows often more affordable than in the secondary rental and resale markets

Our data analysis showed that row units in the secondary rental market with condominium tenure had higher average rents than those in the purpose-built market.
Additionally, when the monthly carrying costs of homeownership were factored in, buying a row unit was significantly more expensive than renting one from the primary market. In fact, in 2018, mortgage carrying costs were about double the average rent for a purpose-built row unit in Toronto. In Ottawa, buying was 33.9% more expensive, and, in London, it was 13.6% more expensive.