People walk past the University of Toronto campus in Toronto on June 10, 2020.Nathan Denette/The Canadian Press
Two companies are trying to tap an unused part of the housing market by matching students and other renters with homeowners who have empty bedrooms.
Sparrow Living Inc., which received federal funding, launched its home-sharing platform in January of last year and is operating in Ontario and British Columbia. SpacesShared began in Barrie, Ont., and Toronto in the second quarter of this year. Both say they have been inundated by requests.
They are attempting to turn unused bedrooms into longer-term rentals. That would effectively house some renters immediately as opposed to waiting for more homes to be constructed.
“We all know how long it can take to build new housing,” said Oren Singer, Sparrow’s co-founder and chief executive officer. “Our premise was, perhaps one part of the solution might be looking at our existing housing supply and trying to make it easier and safer for homeowners to rent out that extra space,” he said.
A growing share of single Canadians and couples are living in properties with empty bedrooms, according to a recent analysis of the 2021 and 2006 census figures by The Globe and Mail. The trend is driven by an aging population, the lack of suitable housing for seniors and the high cost of smaller housing alternatives, according to experts.
“We really want more people to think about opening up their homes,” said SpacesShared co-founder and CEO Rylan Kinnon. “There is such an opportunity to address. Obviously on the older adults, loneliness, lack of connection. And for everybody else, it’s really hard to find affordable housing.”
The average asking rent across the country is more than $2,000 a month, according to Rentals.ca, with prices climbing more than 20 per cent year-over-year in Burnaby, B.C., Laval, Que., and the Toronto suburbs of Mississauga, Brampton and Vaughan. The typical price of a home in Canada is over $750,000.
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With record levels of newcomers and new permanent residents being admitted to Canada over the past few years, demand for housing has increased.
Several months after SpacesShared’s launch this year, it received more than 160 host accounts and more than 800 student accounts throughout Ontario and the Calgary area, according to Mr. Kinnon. The host and student accounts are at various stages of completion. More than 20 rooms that have been vetted by SpacesShared and are listed on its platform. The company has so far brokered three home-share agreements.
“It’s really picking up right now,” said Mr. Kinnon. “It also just speaks to the fact that clearly we’ve hit on something that’s really needed.”
SpacesShared has partnered with Georgian College in Barrie, Ont., and Humber College in Toronto, and is close to teaming up with several other universities and colleges across the country. Their partner schools promote SpacesShared to their student body as well as make introductions to key community members so SpacesShared can quickly build trust and convince homeowners to rent their empty rooms.
Sparrow said within its first year of launching, it brokered 110 home-share agreements. “We have witnessed a significant uptrend in the interest and engagement from both hosts and renters,” Mr. Singer said. The company is on track to broker another 400 this year and is aiming for 2,000 next year, according to Mr. Singer. He would not provide the number of listings, the number of hosts or number of renters, but said there were about 10,000 platform members.
“The appeal of transforming unused spaces into a supplemental income stream to cover rising costs of living, and/or alleviate forms of social isolation and loneliness through finding a compatible housemate match is resonating with homeowners,” Mr. Singer said. “Renters, especially students and newcomers, are finding value in the budget-friendly housing options our platform provides.”
That was the case for 63-year-old Brigitte Sharpe, who said it was a great way to earn revenue, meet new people and help young people secure housing. She missed having company after her son moved out of her two-bedroom apartment in Toronto a few years ago. After hearing a positive review about Sparrow, she decided to list her room.
“I like to have somebody to have a coffee with. If they pass by it’s like, ‘Oh, hi, how are you? How was your day?’ That kind of thing,” Ms. Sharpe said. Her first roommate was a 23-year-old woman from Ottawa who stayed for six months.
Ms. Sharpe said they would have dinner or coffee a few times a week. They also took a few road trips together, including to Niagara-on-the-Lake, Ont. Ms. Sharpe describes her roommate as a very, very good acquaintance and said the young woman will be returning to look after Ms. Sharpe’s cat. She is now getting ready to play host to another renter.
Sparrow and SpacesShared match hosts and renters on compatibility. The host and renter have a chance to meet each other on the platform before they sign rental agreements.
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Both services take a cut of the rental revenue. For Sparrow, it is a one-time fee. That is based on the length of the lease and ranges from one-quarter of the month’s rent to the full month. For SpacesShared, it is a continuing payment of $25 a month.
Mr. Kinnon and fellow co-founder Jackie Tanner, the company’s chief experience officer and gerontological social worker, own the vast majority of SpacesShared. Their company received less than $100,000 in funding from a group of tech investors who have a minority stake in the company.
Sparrow received $500,000 in funding from consultancy firm Accenture PLC, where Mr. Singer used to work as a growth and innovation consultant. Sparrow also received $500,000 from Canada Mortgage and Housing Corp., which is providing funding for affordable housing initiatives under Ottawa’s $82-billion National Housing Strategy.
The federal loan is forgivable if Sparrow meets three milestones. CMHC spokesman Leonard Catling said a portion of the loan has already been forgiven because Sparrow has achieved two of them: launching the home-sharing platform and brokering a certain number of home-sharing agreements. He said the third milestone is an even higher number of matches.