GTA Faces Rental Housing Shortfall of 235,000 Units, Says BILD
The Greater Toronto Area is on the verge of a serious rental housing crunch. According to a new report from the Building Industry and Land Development Association (BILD), the region is projected to face a shortfall of 235,000 rental units over the next decade – and the gap is only expected to grow.
This insight comes from The Pathway for Rental Housing Stock – Second Edition, a white paper prepared by BILD in collaboration with Urbanation and Finnegan Marshall. It updates a 2022 report on the state of the purpose-built rental (PBR) market in the GTA.
Why the Gap is Growing
While there have been some improvements in development conditions – like tax cuts on new buildings and reduced development charges in cities such as Mississauga and Vaughan – those gains have largely been overshadowed by inflation and rising construction costs.
Justin Sherwood, BILD’s Senior VP of Research and Communications, explained that the shortfall is widening because the number of purpose-built rentals being developed isn’t keeping pace with demand. Over 200,000 PBR units are currently tied up in the planning phase, with many projects struggling to make financial sense under current conditions.
A Temporary Break for Renters
Despite high demand, renters did see a bit of relief in 2024. Vacancy rates in the GTA climbed to 2.5%, the highest in 15 years (outside of the pandemic). Immigration has added over 550,000 people to the region in just two years, intensifying the pressure on the rental market.
At the same time, nearly 35,000 rental units were completed in 2024 – more than double the 10-year average. As a result, average asking rents actually dipped, falling six per cent year-over-year to $2,548 in March 2025, the lowest in 30 months.
But BILD warns that this reprieve won’t last. With condo starts collapsing and rental demand still rising, supply will soon lag far behind again.
Condo Starts Collapse, PBRs Take the Lead
Here’s where the numbers get concerning: condo apartment starts dropped to just under 8,800 units in 2024 – a 25-year low and nearly half of 2023’s total. Condos have traditionally supplied a large share of GTA rentals, so this slowdown is a major issue.
On the other hand, purpose-built rentals saw a modest seven per cent increase in starts, reaching 6,637 units. While that’s a step in the right direction, it’s not nearly enough to cover the looming gap. BILD estimates the GTA will need 16,000 to 19,000 new PBR units annually to keep pace—far above current levels.
What Needs to Change
According to BILD, the solution lies in making PBRs financially viable for developers and investors. That will require cooperation from all levels of government. Some key recommendations include:
- Expanding Canada Mortgage and Housing Corporation (CMHC) funding programs.
- Attracting foreign investment by treating housing as critical infrastructure or removing the foreign buyer ban.
- Pushing municipalities to use their development charge reserves for rental or mixed-use projects.
As Sherwood put it, “The story’s not one of immigration. It’s the failure to create the economic conditions that allow us to build housing at a rate that is affordable.”
In short, the GTA’s housing future depends heavily on whether governments, developers, and investors can align to make purpose-built rentals a sustainable reality. Without bold action, the shortfall of 235,000 units could grow into an even bigger crisis.
