Luanna Bowen began looking for an East Vancouver apartment in July. But her budget of $1,200, utilities included, left her battling many other renters also searching for affordable housing.
“Prices were going up, and it was emotionally exhausting getting rejected constantly,” says the 32-year-old film crew worker.
By September, Ms. Bowen decided to broaden her search and look for a rental with roommates. She cut her budget to $900 a month and, by October, she landed a room in East Vancouver. It’s in a two-bedroom apartment shared by three roommates – one of whom uses the living room as a bedroom.
Ms. Bowen thought she’d be living on her own by now. “I’m 32 years old, and living with roommates feels like a big step back,” she says.
But more Canadians are finding themselves in similar living situations as Ms. Bowen. Statistics Canada data from July showed that households composed of roommates – defined as two or more people living together but who aren’t part of what’s called a “census family” – are the fastest-growing type of household. While roommate households still represent a relatively small slice of the overall housing market at 4 per cent, the number of roommate households surged 54 per cent from 2001 to 2021.
Liz Schieck, a certified financial planner at the New School of Finance in Toronto, says that bunking with a roommate is traditionally a financial necessity for students and younger people – who are happy to do so. But Ms. Schieck believes that older roommates can be motivated by finances – specifically having more money left at the end of the month for other goals.
“They can pay down debt, or save for retirement or a down payment,” she explains. “They have more money to spend and have a nice life, like having money to travel.”
And it’s not only single people and individuals who are motivated to share. Ms. Schieck has also noticed couples and families bringing in renters. “I’ve seen that quite a lot,” she says. “It tends to be folks who are less attached to the traditional notion of a nuclear family.”
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Geordie Dent, executive director of the Federation of Metro Tenants’ Associations in Toronto, has seen how climbing rental prices and soaring living costs have catapulted more Canadians in their 30s and 40s back into shared housing.
“Toronto has had very, very intense rental price inflation, way above historical standards,” Mr. Dent explains. “A lot more people are turning to shared accommodation. But I don’t want to normalize this trend. It’s not a good trend.”
As interest rates increase, owners of multi-room dwellings who previously lived alone may also be looking to bring in roommates to help them cover their rising monthly mortgage payments.
Renting as a student or in your 20s might’ve meant handshake agreements, but Mr. Dent says that it’s best to formalize living arrangements with a contract. Tenancy rules vary between provinces. In Ontario, roommates who either share a kitchen or bathroom with their landlord, or who pay their rent to another renter (instead of directly to the landlord) wouldn’t be fully covered under provincial laws.
So, it’s a good idea to a sign a contract outlining details such as how much rent can be increased and how much notice needs to be given when moving out. The website of Mr. Dent’s organization offers templates for such contracts in Ontario. “It would give you a backup set of rights that you can enforce in small claims court,” Mr. Dent explains.
When it comes to putting names on bills, such as water and hydro, Mr. Dent says there’s no real standard or best way to split up these responsibilities. “The important thing is not whether your name is on something,” he says. “You simply want to understand, and you want it in writing, what you’re supposed to pay, if anything.”
Kelly Ho, a Vancouver-based certified financial planner, says that it’s not as important these days to have your name on household utility bills to build credit. “Most people have cellphone bills these days, so that would help build their credit.”
And while it’s more common for landlords to check credit scores, someone bringing a new roommate into shared housing can also request one for peace of mind. “You can run a credit report through Equifax or TransUnion for free,” she says.
If you’re in the situation of becoming an unofficial “head tenant” – where you collect rent from others to pay to the landlord or split up and collect utility spending – it could be wise to assess the financial health of the roommates you bring into your home. Head tenants should also have a higher emergency fund to cover the full cost of their lease’s rent, in case they have trouble finding tenants.
Ms. Ho also suggests that roommates be pro-active about organizing bill payments and household costs between roommates. “There are lots of apps out there that make the management of a household a lot easier,” she says. The app Splitwise helps groups track and split multiple expenses, showing how much is owed to a roommate, or owed to the bill-payer.
Ms. Schieck admits that there’s still a stigma around shared renting as an adult. “Sometimes people talk about living with roommates, after a certain age, as if it’s something sad or disappointing,” she says. “But I think it can be a really great strategy.”
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