Most of Canada's housing conversation is about the homes that haven't been built yet. On October 22, CMHC's chief economist, Mathieu Laberge, published a useful counterweight: a look at the homes the country can't afford to lose.[1] The headline number is that nearly one million dwellings, or 6.1% of the national stock, needed major repairs as of the 2021 Census. The detail that matters for anyone who owns or lends against older apartment buildings is where those repair needs sit, and how hard it is to pay for fixing them in a rent-controlled market.

The numbers in CMHC's note

  • 919,550 dwellings needed major repairs in 2021, out of about 15 million (6.1%).[1]
  • Renters are more exposed than owners: 7.3% of renter households lived in a home needing major repairs, against 5.3% of owners. In subsidized housing the rate was 9.4%.[1]
  • Ontario has improved: its major-repair rate fell from 8.02% in 1996 to 5.72% in 2021, one of the larger provincial improvements. Toronto's fell from 7.58% to 5.08%.[1]
  • Rental spending runs higher: citing Statistics Canada, CMHC says households spend roughly $25 billion a year on maintenance and repairs, and spending on rental housing is about 23% higher than on owner-occupied housing, partly because the rental stock is older.[1]
  • Disrepair is a health issue, too: homes needing major repairs were about 13 times more likely to have mould or mildew than well-maintained homes, and almost four times more likely to have pests.[1]

CMHC's framing is about affordability. Homes in poor condition are often the cheapest, and if they deteriorate past repair, new construction has to replace them before it adds anything. "Every home lost to deterioration is a home that needs to be replaced," Laberge said.[2]

Why the cheapest units are the ones that matter most

London's rental data shows why this isn't just a social-housing story. In CMHC's October 2025 Rental Market Survey, the London CMA's overall apartment vacancy rate rose to 4.0%. But the bottom rent quartile, the cheapest quarter of units, was still at 1.2% vacancy. The third quartile was at 6.6%.[3]

Age and rent go together. London apartments built from 1960 to 1974 averaged $1,354 a month in October 2025. Units built since 2015 averaged $2,124.[3] Vacancy by building age was fairly even, roughly 3.7% to 3.8% across the 1960 to 1989 cohorts and the post-2015 stock.[3] So the softness in London's market is showing up in mid-priced units, not in the older, cheaper end where demand is deepest.

That's the tension in CMHC's note. The older stock is where tenants have the fewest alternatives, and where landlords have the hardest time recovering the cost of upkeep.

The recovery problem

Most units first occupied before November 15, 2018 are subject to Ontario's rent increase guideline. For 2027, that guideline is 1.9%, down from 2.1% in 2026, and it is capped at 2.5% by law.[4] On a $1,354 unit, 1.9% works out to about $26 a month.

The tool for funding major capital work is an above-guideline increase (AGI) application to the Landlord and Tenant Board. The rules are strict:[5]

  • The work has to be an eligible capital expenditure: protecting the building's structure, maintaining health and safety standards, keeping plumbing, heating, electrical or ventilation systems running, improving accessibility, saving energy or water, or improving security. Cosmetic or luxury upgrades don't qualify.
  • It has to be finished within an 18-month window that ends 90 days before the first requested increase, and fully paid before filing.
  • The increase is capped at 3% above the guideline in any year. If more is justified, the rest can be spread over the next two 12-month periods, also at up to 3% a year.
  • New tenants who move in after the filing deadline can't be charged the increase. The board can also deny or delay an AGI if there are serious unresolved maintenance problems.

On that same $1,354 unit, the 3% cap is about $41 a month in the first year. That helps, but it arrives with a lag, covers only eligible work and can be contested at a hearing. Asking rents are also no help on turnover right now: Rentals.ca and Urbanation reported purpose-built asking rents down 2.7% nationally year over year in September, and Ontario rents across all property types down 4.8%.[6] The usual way to fund deferred work in an older building, re-leasing at market when a unit turns over, is paying less than it did two years ago.

What it means for lending against older buildings

For lenders, CMHC's data is a reminder that a capital plan belongs in the credit file, not just the appraisal. On a loan against a 1960s or 1970s walk-up or mid-rise, the useful questions are practical:

  1. Is there a recent building condition assessment, and does the budget match it? A reserve built on a 10-year-old report doesn't reflect current costs.
  2. What part of the capital plan is AGI-eligible? Boilers, roofs, windows and risers usually are. Lobby finishes and amenity upgrades usually aren't. Underwrite the recoverable part separately.
  3. Does the pro forma assume turnover gains that today's market may not deliver? With asking rents falling, the gap between in-place and market rents may be narrower than it was when the deal was first modelled.
  4. Are there open work orders or tenant maintenance applications? Unresolved issues can hold up an AGI and add legal cost. Our earlier piece on the LTB's September process changes covers the operating side.
  5. How long does it take for capex to pay back at the 3% cap? If the answer is longer than the loan term, the exit has to work without it.

None of this makes older buildings bad credit. In London, they are the tightest part of the market. But full occupancy and a weak capital plan can coexist for years before condition shows up in the numbers.

What the CMHC note doesn't tell you

The figures come from the 2021 Census, which relies on households reporting their own housing condition, so they predate five years of construction-cost inflation. The note doesn't break out purpose-built rentals from secondary rentals like condos and basement units, and it doesn't give data for London, Windsor or Chatham-Kent. It describes the size of the problem. It doesn't tell you which buildings have it.

That's the job of due diligence. CMHC's point, that preserving existing homes is part of the supply answer, has a simpler version for owners and lenders: in rent-controlled stock, the cheapest repair is the one done on schedule.

This article is for information only and is not investment, legal or financial advice.

Sources

[1] Build more. Lose less: Why maintaining existing homes matters, CMHC Housing Observer (Oct. 22, 2026): https://www.cmhc-schl.gc.ca/observer/2026/build-more-lose-less-why-maintaining-existing-homes-matters

[2] Nearly one million homes in Canada need major repairs: Why maintaining them matters, CMHC news release (Oct. 22, 2026): https://www.newswire.ca/news-releases/nearly-one-million-homes-in-canada-need-major-repairs-why-maintaining-them-matters-838395963.html

[3] Rental Market Survey data tables, London CMA, October 2025 (Tables 1.2.1, 1.2.2 and 1.4), CMHC: https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres

[4] Residential rent increases, Government of Ontario: https://www.ontario.ca/page/residential-rent-increases

[5] Information about Applications for a Rent Increase Above the Guideline, Landlord and Tenant Board (Tribunals Ontario): https://tribunalsontario.ca/documents/ltb/Brochures/Information%20about%20Applications%20for%20a%20Rent%20Increase%20Above%20the%20Guideline.html

[6] October 2026 National Rent Report, Rentals.ca and Urbanation (Oct. 7, 2026): https://rentals.ca/national-rent-report