You had your best-laid plans and then COVID-19 came along and hammered the entire economy. But you’ve got this – if you have the right information. Join Rob Carrick and Roma Luciw on Stress Test, a podcast guiding you through one of the biggest challenges your finances will ever face.
Roma: Living with roommates is a rite of passage when you first move out. Shared bathrooms, loud music, communal meals. It’s like living in a 90′s sitcom.
Rob: But the laugh track is fading for the growing number of Canadians living with roommates longer than they ever expected. What was once seen as a short chapter in life is turning into a long-term way to find affordable housing.
Roma: Welcome to Season Eight of Stress Test, a personal finance podcast for millennials and Gen Z. I’m Roma Luciw, a personal finance editor at the Globe.
Rob: And I’m Rob Carrick, personal finance columnist at the Globe. Inflation is everywhere these days, but renters are seeing some of the biggest price increases in expensive cities. Some people are spending as much as half their income or more to cover rent. One way to lower the bill is living with roommates. Roma, what does the latest official data tell us about roommates?
Roma: The data tells us that households comprised of roommates, which are two or more people living together who are not related, are the fastest growing household type. It rose 54% in the past 20 years. That’s according to a Statistics Canada report that looked at housing trends from 2001 to 2021. That number rose faster for those in their twenties and thirties, and sharing homes with roommates was more common in downtown regions of big urban cities, you know, especially where we have large post-secondary institutions. You know, we’ve seen the mismatch between supply and demand has sent rents soaring. Ever since the COVID-19 restrictions started to fall away, this has not let up. Rob, why don’t you tell us a little bit about what exactly rents are doing?
Rob: As a long-time watcher of this sort of thing, I’m horrified by the numbers. Horrified. I don’t know how people are coping. I cannot remember a worse personal finance problem that even beats expensive housing. People are being pounded by these repeated rent increases. And, you know, you have to look, what can you do? And you can move back home. You can move to a location way away from where you want to live or roommates.
Roma: And it boils down to this. Soaring housing costs are changing the way Canadians are living, and that’s being driven by financial hardship. What we’re seeing is that people are changing their living patterns, and that’s something that we should all be concerned about.
Rob: Yeah, we have to ask when does it end? If I’m renting in my late thirties, how can I ever afford to get into the housing market? When do I ever get to own instead of rent?
Roma: And where is the financial cushion? What happens if your car breaks? Your cat needs to go to the vet. You lose your job. Where is the ability to cover those kinds of things?
Rob: Well, don’t have a cat is some advice I would provide right off the top there.
Roma: After the break, we’ll hear from our first guest. She didn’t want a roommate, but she needed one so she could afford basic necessities like putting food on her table.
Shalena: I’m Shalena. I’m 35 years old, and I live in Halifax, Nova Scotia.
Roma: Shalena is a specialist teacher for the deaf and hard of hearing. She has a second career as a musician with the Canadian Armed Forces. She’s from B.C. but moved to Moncton, New Brunswick, in February of 2020.
Shalena: When I did decide to move to the East Coast from British Columbia, the affordability was a huge factor. However, quickly following COVID, I watched as the prices increased to right before me, the housing market boomed. The apartment building I lived in or was living in at the time was sold and bought by a company in Ontario, and the rental increased from 1200 a month to 1400 dollars a month. And that’s what killed me. That’s what literally did me in. 1200 was manageable. But that extra 200 a month, I couldn’t. And I unfortunately have. I do have friends who have been out of homes, and out of housing because of that exact situation.
Roma: She loved her two-bedroom apartment in Moncton. It was a brand-new building with an open-concept kitchen, a patio, a garage, and a view of the water. She lived there for about a year at the higher rent before she felt forced to leave.
Shalena: I knew 1400 dollars was too much because there were moments where I said, I can’t put food on the table. Like, I can’t go get groceries right now. It’s either putting gas in the car and getting to work or not having food and figuring it out. And actually, there was a big moment, Easter dinner. I want you to know, that I usually love to celebrate and have something. And I went, what are we picking out of the freezer? And I think that’s very realistic for a lot of people. So there is that piece that I just couldn’t it was gas or food.
Roma: She was paying roughly 50% of her income on rent and struggling. Then a teaching position came up in Halifax. She was excited about moving to a city known for its music scene.
Shalena: And so when the option came to move to Halifax, I contacted a friend here who happened to have her roommate move out at the same time. And honestly, it’s it really saved me. I don’t know what I would have done otherwise.
Roma: Selena lived with roommates in university and at times in her twenties. It isn’t her first choice now, but she feels fortunate to have found a friend to live with instead of a stranger, especially since she comes with a cat and a wind instrument.
Shalena: Yeah, so I do. I play, I play the bagpipes, and they’re quite loud, of course. So she’s okay with that? Now, of course, I don’t play the bagpipes in this apartment because. No, I’m sure there are other people in this building who would not like it. There’s a practice version that sounds kind of like a snake charmer. And again, it’s not everybody’s cup of tea, but she doesn’t mind because she plays. So it’s that piece is really, really nice. And actually, probably after I get off this call, I’m going to go downstairs into my parking garage and play my actual bagpipes right beside the dumpsters.
Roma: Shalena moved to Halifax just over a year ago. The two women get along well, which they credit in part to their friendship, shared musical career, and both being mature enough not to sweat the small stuff. Still, they each rather have their own space.
Shalena: I know for both myself and my roommate, having a roommate is something that we don’t necessarily want. She’s even admitted, If she could not have a roommate, she wouldn’t have a roommate. I do miss not having a space that I can explode in and do some crafts and do some sewing and do some work and close the door, and it all disappears. I definitely do not have that luxury. And just like, how do you move into somebody else’s home? How do I bring my stuff in? Do what? What do I bring? What do I get rid of? That’s not needed.
Roma: Despite the frustrations, having a roommate has been worth it.
Shalena: So the stress of living on my own in a place where I was not affordable versus living with a roommate, where you might see each other off every now and then. It’s really not comparable because not putting food on the table like that’s a that’s a human need. Like, that’s a basic life need. So that was much more stressful.
Roma: Since her housing costs have dropped, the stress is off the table.
Shalena: Having a roommate just allows you to split everything down the middle. So luckily, we are paying 1400 around almost the, say, 1500 where we are. So you split that down the middle, you add my parking because I have a vehicle, so I add $100 for that. It’s still 800 $900 a month. Then you add utilities, you split that in half. So it’s only $30 a month. It just cuts everything you share. So I feel like I almost became a millionaire in the last year. Cause there I have money in my pocket. And to be honest, there are moments where I go, I don’t know what to do with this. This is a new experience. I vividly remember the moment that I walked into a shopping mall to buy something for myself, and I went, I don’t remember how to do this anymore because I haven’t done this in years. Just being able to buy me maybe a new pair of pants and not worry about going up to the debit machine and be like a) Should I be doing this? And b) is it going to go through like, oh, you know, being that, that nerves and that Yeah, I want to say I just want what do I like? I don’t even remember what I like my style anymore.
Roma: More importantly, Shalena is finally able to save for the future. If she needs to move, she’d consider finding another roommate because of the financial upside.
Shalena: My dream, My number one goal, has always been to own a home, so that is a big portion that now I’m looking forward to finally being able to save. And even if it’s not a home in the sense of with our interest rates being so high and not accessible, at least maybe I’m saving for something. Saving, I guess, is better than just always spending and being in a small space. It doesn’t allow me to buy anything because I have no space for it. So it’s a double whammy.
Roma: After the break, we’ll hear how one woman goes online to find and vet potential roommates.
Rob: It’s one thing to live with friends, but many people need to find strangers to live with. Our next guest is pretty particular about her living space. She talks through how she found the right person to split the 20 $900 per month rent for her two-bedroom, one-bathroom condo in downtown Toronto.
Em: So my name is Emmanuelle, but everyone calls me Em. I am 28 years old, and I live in Toronto, Ontario. Every single person that I’ve been roommates with I met online, either through Kijiji or through a Facebook group. For me, it’s always been a gut feeling with somebody. And currently, I have found a new roommate to move in with me. She’ll be moving in in a couple of weeks. The tactic that I used to to find her in this really busy saturated market of people looking for places was being super transparent in my Facebook posts about what I was looking for. I am in my late twenties, and for me, schedule alignment as well as lifestyle, cleanliness, you know, your tastes, and even interior design are important to me. My home and my personal environment are really essential to my mental health and well-being. So I wanted that to be mirrored in whoever I was going to move in with. I started with a screening process where I’d have a quick Facebook call, I’d show them around the apartment, and then ask some questions based on either my curiosity of, you know, what they’ve messaged me as well as things that I wanted to clarify with them. Because I was the sole leaseholder, someone would be paying rent directly to me, I asked for documents like I.D. and credit check, proof of employment, and references as well. Just in case I felt confident about vetting them once we got on the phone. But, you know, you never know. So it’s good to have those as well. To be fully transparent, I am the leaseholder. And so I do have an upper hand in this really saturated competitive market. So I knew that I would be able to find someone. I heard from, I think, over 50 people within less than a week, and I interviewed about 10 people to get the one eventually. The funniest response that I got from somebody where I just thought, there’s no way I’m going to interview with you, was from this person who said that they didn’t have money for the first few months of rent and they were just like point blank, sorry, I can’t pay rent for the first few months. I hope that’s okay with you. So good on them for being honest. But yeah. So I did make a roommate agreement because this is my first time being the sole leaseholder for my current place. And so, like, I think like anyone would feel this way just knowing that the other person is liable to pay rent to you so that that is squared away and you don’t need to worry about that. That was really important to me to put in writing. And I thought, Well, why not add in everything else that we talked about and also give the other person a chance to put in any other of their ideas or requests? So I took my Facebook post that I put in the group, and I went on chat GPT, and I said, hey, can you please write me a roommate agreement for the City of Toronto, Ontario? These are the requirements, and I just copied and pasted in about 10 seconds later I had a roommate agreement. So yeah.
AI Robot: Roommate agreement. No, leaving your dirty dishes in the sink, no smoking inside. Just be cool and respectful.
Rob: Next, we’ll hear from a woman who’s lived with the same roommates for almost all her adult life. And they’re not living together just because it’s cheaper.
Kate: I’m Kate. I live in Vancouver, and I’m 29.
Rob: Kate met her roommate in college. They’ve lived together ever since. When they were 25, they joined together to rent a raccoon and rat-infested house in South Vancouver. They recently rented a house near Kitsilano Beach for $5,000 per month.
Kate: It’s beautiful. We have a backyard, we have free floors. And so me and my partner live on the bottom floor. We have our own kitchen and our own living room. All of our friends who are also a couple live on the second floor with their own kitchen, living room, and bedrooms. And then our final friend, she lives on the top floor. And so we share the space; we share the living. We share, you know, the backyard, the front yard, the garage, the woodshed, the shop, you know, the carpentry, woodworking shop. But we all kind of have our own space at the same time, which just works perfectly. And we pay a lot less rent than anyone else. I know. And we have a lot more space for it. So we’re sitting pretty happy right now, to be honest.
Rob: Right now, the median one-bedroom apartment in Vancouver is about $2800 a month. Kate says is between her and her partner, who works a steady government job, they could technically afford that rent, but it would require stretching themselves to their absolute financial limit.
Kate: It would be feasible for Eric to pay about $2000, but there would be no savings, and that would be a significant chunk, like over 50% of his income. I could pay at max $800, $900, maybe a thousand. It could be done. But the things we’d have to sacrifice along the way would be substantial. You know, no more hobbies. We’d have to eat the cheapest, crappiest of groceries You know, it’s not like our grandparents or like other generations where it was a fifth of their income.
Rob: Kate says that amongst her friends and peers, the unaffordability of housing in Vancouver is a constant anxiety.
Kate: I think that there’s a sense of hopelessness, anger, frustration. When they look around and they’re paying 20 $800 for one bedroom, and when we say one bedroom, we’re not talking about a living room with a little bedroom with maybe like a little den, like we’re talking about like that studio apartment, the kind of place where you come back after a vacation away and you feel depressed when you walk into that place, that that’s what my friends are looking at and it really eats into the quality of their lives you can’t have friends over. So, on Friday night, your space is not large enough that you can have a few friends over for a drink. So you end up going to the bar, and then you drop a couple hundred dollars, and that also eats into your income as well. Yeah, there’s a lot of frustration as a lot of despair. There’s a lot of anger because we look around and we don’t know why that is. We don’t know why this was not aggressively dealt with a long time ago. Housing, everyone needs it. I do know there are people who can get lucky. Timing is everything. Lucky. When I first moved to the city five years ago, it used to mean that you could get like, maybe like an old, you know, the apartments that were built in the sixties and seventies are a little worse for wear, but they are a lot more spacious. And so you could get one of those a one bedroom then for maybe 1500. And it was a pretty good price, and you could have a nice life there. But lucky by not these times. I mean, you’re paying like 2300. You managed to save yourself $100, but you’re still living in basically a shoebox. And everyone’s like envious because you managed to make it for $2300, you know? And then you combine that with the fact that we’ve been taught our whole lives that home ownership is the way to accumulate wealth, and we can’t do that because we’re paying all of our savings into rental, which is basically just washing money down the drain.
Rob: She recognizes their living situation isn’t for everyone.
Kate: But I also know that finding the right confluence of people who get along just right in just the Goldilocks effect is very, very difficult. I’m under no illusions that this can be replicated. It could be. I just don’t assume that it can be that that would lead to some really tough questions that we’d have to have if one of us wants to move out. Or if one of us had to move somewhere else for work. What would we do at that point? And I think that it would really come down to who was available. think that in my early twenties, I definitely did the whole posting on Craigslist or Facebook and found random students that I could live with. And those people became good friends of mine. I don’t think I’d be willing to do that anymore. I think that as you get older, you become more set in your ways and the ways that you like to live, and people that you’d like to be around. And I’m not sure that I could just live off a total stranger anymore. I mean, I think the housing market being what it is, I’d have to on, but it would I wouldn’t do it quite so joyfully as I do now.
Rob: If she had to live alone, she figures she’d have to give up the freelance career that she loves for something more stable and lucrative. Instead, she gets to enjoy life.
Kate: Well, for me, with my income level, I’m not really looking at saving towards buying a house. But it’s also, you know, the things that we can afford to do. You know, we can say, sure, I love to ski. I can actually pay for the ski pass because that ski pass is how much I save rent a month, you know. And I think the really big thing is that we have freedom of choice. We can do the jobs that we want to do. So maybe my roommate, who’s a lawyer, can take the passion job, the passion project, instead of the big firm job that pays more because she has that choice. Or, for me, I can choose to stay as a journalist. We can afford to help our friends when they need it. We have a roof that we can say, you know, someone goes through hard times. We can say, Yeah, you can move in for a month if you need that. We have that space. And I think that’s just like a beautiful thing to do. And no one else that we really know in the city can do that. If you think about when we were growing up, you know, our parents had extra rooms in the house that people could come and stay and live there, and no one else we know can accommodate someone for more than a couple of days because they’re turning their living room into a bedroom for another roommate. So they can’t, like, have a house guest. And so the kind of community that we’re able to build outside of the community we currently have is also really, really important to us because we have that financial and spatial freedom.
Rob: Their priorities in life may change in the future, but for now, they’re happy to live together.
Kate: Do I, as a 29-year-old woman, sometimes for the crippling weight of societal expectations on me? Yes. Yes, I certainly do. Yeah. Yeah. I always think about that. I always think, you know, I’m not necessarily where, you know, would 18-year-old me be looking at my life right now? I’m thinking, how old are you? And why don’t you have the why have you had the marriage and the kids and the stable job and all this different stuff? And I definitely feel that there’s a way that I was expected to live, and I expected myself to live. But it’s a constant battle every single day. I’m not going to lie and say I’m perfectly content and confident in my life. Decisions like, no, I’m crippled by self-doubt all the time. But the thing that pulls me back from that is when I have a barbecue in the backyard of my best friends, and I just feel content and safe and happy. I’m like, Yeah, this is worth it.
Rob: Living with a roommate is an obvious way to cut living expenses. So it’s no wonder we’re seeing more people do it these days. Roma, what are your takeaways?
Roma: 1) ask yourself how much less financial stress you would face if you cut your rent by half. If you can use that money to pay down debt or build your savings, living with a roommate can still be a temporary solution. 2) focus on the two C’s when finding a roommate. Cash flow and compatibility. You want someone who will pay their share of the rent on time, someone who you can enjoy living with or, at the very least, not hate it. 3) Having a signed roommate agreement that spells out the financial and living rules will help set clear expectations and prevent tensions because everyone wants their home to be a calm, happy space.
Rob: Thank you for listening to Stress Test. This show was produced by Kyle Fulton, Emily Jackson, and Anna Stafford. Our executive producer is Alisha Sawney. Thank you to Kate, Em, and Shalena for sharing their stories.
Roma: You can find Stress Test wherever you listen to podcasts. If you like this episode, please give us a five-star rating and share it with your friends.
Rob: Next week on Stress Test, we talk about dual income, no kids, couples also known as Dinks. How good is life with no kids?
Roma: Until then, find us at the Globe and Mail dot com. Thanks for listening.