Are Torontonians going to gentrify northeastern Ontario?

Now that remote work has allowed people to expand the scope of their house hunts, there are concerns that GTAers will force housing prices in Sudbury and the surrounding area up — and residents out
By Josh Sherman - Published on Oct 15, 2020
The average price of a Sudbury home ($339,439) was up 27.3 per cent on a year-over-year basis in September. (Wikipedia/P199)

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Even though Lisa D. Long is a homeowner, she’s ambivalent about rising property values in her Sudbury neighbourhood: “It’s good for someone of privilege — someone who’s privileged enough to have a mortgage and to be able to pay a mortgage — but the other piece of it is high housing prices are affecting someone who is not at a place of privilege.”

The executive director of the Samaritan Centre purchased a detached home in the Middle Lake community last November, when she moved with her husband from North Bay to begin her job at the downtown Sudbury social-services hub. Aware of how she and her neighbours benefit from higher property values, she’s worried about the other side of gentrification, which she sees in her line of work. Recently, someone purchased a rooming house, located about a block away from her workplace, and evicted between 30 and 60 people. “It happened really, really quickly,” she says.

Some experts say that homebuyers from southern Ontario, and Toronto in particular, are contributing to soaring home prices in the northeastern Ontario city: the average price of a Sudbury home ($339,439) was up 27.3 per cent on a year-over-year basis in September, according to the local real-estate board. Remote work has allowed people to expand the scope of their house hunts, and COVID-19 restrictions have put a premium on dwellings with large lots and room for home offices or classrooms.

That has some, Long included, worried about the effects on housing affordability.

“I think long-term [housing affordability] will be an issue or could be an issue,” says Christopher Alexander, executive vice-president for the Ontario-Atlantic region for RE/MAX, referring to markets in Sudbury and Thunder Bay. Last month, RE/MAX released its fall forecast, which predicted that, by the fourth quarter of 2020, home prices in both Sudbury and Thunder Bay will haven risen 10 per cent year-over-year, making them outliers — the largest projected increases for Ontario markets outside the Greater Toronto Area and Muskoka. “Both Thunder Bay and Sudbury have fantastic local economies, and they’re experiencing much of what the GTA has experienced,” Alexander says. “Then you have this recent phenomenon of people more inclined to work remotely, and a lot of people who are not being forced to come back into work to an office for the foreseeable future are considering as far away as they need to get what they need.”

It might not be just interested Torontonians that are contributing to price increases, according to Dan Gray, president of the Sudbury Real Estate Board: some locals stuck living at home with parents or in rental apartments during the lockdown may finally want out. “And then, what you have is, a lot of the higher-end stuff — higher end for Sudbury — you’re getting a lot of activity there because of the low interest rates. You’re getting a lot of different things happening,” he says, adding that there is also likely pent-up demand from this spring, when many people who were planning to list chose to wait due to pandemic-related uncertainty.

Despite the rapid home-price growth seen in Sudbury, Christopher Zakher, a senior market analyst with Canada Mortgage and Housing Corporation, says that Sudbury remains affordable, at least by some measures. “When you look at the average income and average home price, Sudbury is still among one of the most affordable markets in Ontario. But, again, those are averages — there’s a lot more data beneath that,” he explains. “There might be some subsets of the population that are benefitting from a very high income and that are bringing that average up … which makes things look a little bit more attractive or rosy.”

Like Gray, Zahker suggests the Sudbury market is playing catch-up from a lockdown-slackened spring. “These sharp increases in price, it’s largely a supply-side story,” he says. “When you look at the number of new listings entering the market, they fell off drastically in the early months of the pandemic — March, April, May — and they still haven’t yet rebounded to those pre-pandemic levels.”

Zahker hasn’t seen any demographic trends that indicate buyers from the south are influencing the market, at least not yet. He also says that, to date this year, home sales in Sudbury have been modest. Through the first nine months of the year, 2,060 residential properties changed hands, up 3.8 per cent compared to the same period in 2019, according to the Sudbury Real Estate Board. “This growth is roughly in line with what we’ve been seeing over the last five years in the Sudbury market, which has really benefitted from the aging of millennials into their homebuying years, the affordability of the market, and the period of very low interest rates,” says Zahker.

But at least some former GTAers have made the move. Jamie Elliott and his wife, Penny, had been planning to move from Burlington to the Sudbury area for years and decided to pull the trigger during the pandemic, purchasing a property in Espanola this summer. “Our original plan was to move up north and early retire (given that we are in our early forties, it was more like financial independence),” he told TVO.org via email. “Given that Penny and I were working from home due to Covid, our employers changed their policies and embraced us working from the North.”

Since the rooming house near the Samaritan Centre was sold, Long says, some former residents who previously used the latter’s service’s haven’t returned: “I don’t know where they’re accessing services, or how they’re getting food, or if they’ve relocated to a different city — I don’t know.”

If vulnerable populations have to fan out from the downtown core, where many social services are concentrated, that could end up changing the way the Samaritan Centre operates, Long notes — and service providers may find themselves having to go on real-estate hunts of their own. “People that are in need of social programming, as we see them move into different pockets of the city, then those neighbourhoods will need to address those social problems by what?” she says. “By opening up different satellite food banks, different feeding programs, perhaps.”

And when lower-income renters are pushed out of certain neighbourhoods, she says, addiction and mental-health issues can be exacerbated: “These issues all intersect, like, a lack of safe affordable housing intersects with mental health, with addictions — all those pieces intersect. All these social issues. They don’t live in isolation from one another.”

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