Hundreds of renters competing for housing as demand outpaces supply in St. John's area

The rental market on the the northeast Avalon Peninsula is getting competitive — and dire — for those searching for a place to live in and around Newfoundland and Labrador's capital city. 

Social media was buzzing late last week with a post showing dozens of people waiting to view a basement apartment in Mount Pearl, just west of St. John's. 

Penney Barnes knows just how tight the rental market is on the northeast Avalon. The Paradise resident and her partner, as well as their four older children and their two dogs, are looking for a new place to live by Aug. 1.

She said things were challenging even when the market was at its best but it is dismal now. 

"We need four bedrooms at least and preferably a backyard and pet friendly. That is challenging. Extremely challenging," Barnes told CBC News on Tuesday. 

"Now that we're looking again we're looking at an increase to our rent, in just two years, to at least $600 to $800 a month extra than what we're paying now. It's going to hurt. There's no doubt it's going to hurt."

Barnes said her oldest children are going to have to pitch in to help pay the bills because there's just no other way to make ends meet. She also said she's unwilling to find new homes for her pets.

"I'm honestly struggling to understand why it's so bad right now. The cost of living is really high right now for everyone," said Barnes. 

"I don't understand where the influx of people is coming from who need rentals. I haven't quite figured that out."

Surge in demand

One landlord in Paradise says she has received hundreds of inquiries since posting about her basement apartment.

"My phone was just blowing up. I couldn't even keep up. At first I started printing the responses so I'd be able to go through them and it was impossible," Haleigh McLean said Monday. 

"There was just over 400 [messages] and I've never seen anything like it in my five years of being a landlord."

McLean said the demographic has changed from mainly students, about 15 applications, to just about everyone else including seniors, families and single parents.

"I even had people applying that had four children plus two parents for a two-bedroom apartment," she said. 

"I had a lot of people asking could they come to my house immediately and pay me in cash upfront, significantly more than I was asking."

Hope Jamieson, Newfoundland and Labrador program manager for the Community Housing Transformation Centre, a national affordable housing support organization, says the situation was bad even before the pandemic and is getting worse.

Jamieson said there are "substantial problems" with housing affordability for major segments of the population across the province and in St. John's in particular. The most recent data they have from the Canadian Mortgage and Housing Corporation shows that there was a drop in the number of rental units available between October 2020 and October last year.

"It's not a lot, we're talking 50 units, but percentagewise that's not an insignificant number."

Rising rent, rising demand

Jamieson said average rent rose across all types of homes in that period and with the increasing price of oil — many of the city's rental properties are heated by furnace oil — there's a massive cost-burden on renters. She said things are expected to get worse.

As supply has decreased, demand has increased from people moving to the city from mainland Canada to work remotely, students attending Memorial University and outside the province investing in real estate in a market that is less expensive than Toronto's or Vancouver's, said Jamieson. She said 52 per cent of the province's rental units are owned by real estate investment trusts.

"If this trend continues unabated we could end up in a situation like many other regions," said Jamieson. 

"However, we can fortunately decide to change tack at this point and invest heavily in the development of affordable rental housing in the community sector."

McLean ended up renting her apartment to a single parent who shares mutual friends.

She said she hasn't raised her rent above $900 in the last five years but notes the messages that rolled in from perspective tenants were often accompanied by difficult life stories and pleas. 

"I've never seen this type of demand. The lack of housing right now is absolutely insane," she said. 

"For landlords, too, it's risky for us also. Our costs of living have gone up so much and it's hard to make a place that's affordable."

Read more from CBC Newfoundland and Labrador