Private equity and REITs charging highest rent premiums
A new study from the University of Waterloo points the finger at Canada’s biggest financial landlords for driving up rents in the Greater Toronto Area.
The research shows that financial firms like private equity companies and real estate investment trusts (REITs) are not only charging more than other landlords, they’re also raising rents faster, especially in lower-income and racialized communities.
Researchers Cloé St-Hilaire and Martine August, analyzed rent and ownership data for 1,602 buildings in the GTA between 2022 and 2024. Their findings reveal that the largest 25 financial landlords in Canada now control nearly 20% of the country’s private, purpose-built rental housing.
“We found that financial firms charged the highest premiums across the GTA, posting 44% higher rents, or $670 more, than local averages,” they wrote.
Non-financial chain landlords charged about 30% more than average, while smaller landlords raised rents by 15% to 22%. These premiums applied whether the buildings were new or in need of repairs.
Financial landlords
The researchers explained that financial landlords act differently than small or independent landlords, not simply because they pursue profit, but because they are structured to maximize shareholder value.
“These ‘financial landlords’ treat housing as an investment product, not as a basic human need,” the study states. They also noted that financial firms often use strategies unavailable to smaller landlords, including algorithmic pricing tools and corporate-level investment techniques to boost returns.
According to the study, financial firms have been open about their rent strategies. A 2018 presentation from Minto REIT said it had “the highest in-place rent” among its peers. In 2020, Centurion REIT highlighted in a report that its rent increases were outpacing inflation and average rents.
Starlight Investments, Canada’s largest private landlord, reported a $411 increase, a 31% jump, at one of its buildings after upgrades, describing this as part of its “value add strategy.”
Financial landlords were also found to increase asking rents by 5%, or $96, every quarter. By comparison, smaller-scale landlords raised rents by 3.6%, or $59. Using a regression model, the researchers estimated that tenants would pay 13% more for a unit owned by a financial firm than one owned by a small landlord.
One of the highest rent premiums was linked to Woodbourne, a private equity firm that said it uses RealPage’s YieldStar pricing software. This algorithmic tool is now under investigation by the Competition Bureau of Canada and is at the center of a lawsuit accusing over a dozen landlords and property managers of conspiring to inflate rents.
Premiums highest in marginalized areas
The study also identified a troubling pattern in how these financial landlords operate in lower-income and racialized areas.
In Toronto’s “neighbourhood improvement areas,” which the city defines as having inequitable social and economic outcomes, financial firms were found to charge a 49% premium, compared to 41% in other parts of the city. The researchers found a spatial connection between areas with higher rent premiums and those with a greater share of racialized residents.
“These findings suggest that financial firms are complicit in driving gentrification in marginalized neighbourhoods, targeting areas with lower-income and racialized renters for the most aggressive rent increases,” the authors wrote.
Financial landlords in Canada have also been associated with increased eviction filings, higher rates of building disrepair, and greater cost burdens for tenants. The researchers argue that these trends are symptomatic of a broader phenomenon: the financialization of housing, in which homes are viewed primarily as assets for maximizing returns rather than as a basic human right.
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While financial firms report record-breaking rental uplifts and strong returns to shareholders, the study notes that housing affordability continues to decline. In 93% of Canadian neighbourhoods, a full-time minimum wage worker cannot afford a one-bedroom apartment, a 2022 report found.
“Financialization is detrimental to the right to adequate housing,” the authors said.
The study calls for stronger tenant protections, better tracking of landlord ownership, and more investment in social housing. Without these steps, the researchers warn that financial landlords, already the largest acquirers of rental properties in the country, will continue to expand their influence and deepen Canada’s affordability crisis.
“If left unchecked, financialization will continue to deepen the affordability crisis, with the greatest harms falling on those who can least afford it,” the report said.
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