Demand for new rental housing has exploded in Toronto over the past couple of years amidst historically low vacancy rates and a lack of affordable options for potential home buyers.

The city's fast-growing population has only heightened competition among renters, who make up nearly half of all residents, driving average monthly rent prices to more than double in just three years.

Something's got to give, and all three levels of government know it, which is why they've been providing incentives for the development of purpose-built rental housing within the city.

We don't have nearly enough places to meet the growing demand for affordable rental units yet, but programs such as the federal government's National Housing Strategy and Ontario's Fair Housing Plan appear to be working in terms of stimulating new builds.

The GTA condominium and apartment market analysis firm Urbanation Inc. just released its latest report on the state of purpose-built rental projects in the Toronto area, and things are looking good for the future.

Urbanation Q4 Rental Survey Results:
GTA Rental Supply Pipeline Reaches Nearly 70,000 Unitshttps://t.co/kRrCKpOWZ1 pic.twitter.com/KHq1W08FGi

— Urbanation Inc. (@Urbanation) January 17, 2020

"At the end of 2019, the number of purpose-built rentals under construction in the GTA reached 12,367 units — the highest level since the 1970s when modern rent controls were enacted," reads the report.

"The number of rentals that started construction in 2019 totaled 4,172 units, declining from the 25-year high of 5,620 units that started in 2018," it continues.

"However, rental starts remained higher than completions, which grew to 3,630 units — also the highest level since the early 1990s, allowing the inventory of future units underway to continue rising last year."

In addition to the units that were either completed or started going up in 2019, developers submitted another 17,082 new purpose-built rental apartment units for approval throughout the course of 2019 — up 43 per cent, year over year, from the 11,989 units submitted in 2018.

In other words, we could see tens of thousands of new rental units hit the market across the Greater Toronto Area over the next decade, though they likely won't be rent-controlled, given that they're new builds.

Toronto rental construction ramped up in 2019 amid low vacancy rates https://t.co/KfAn4WpYjN

— Urbanation Inc. (@Urbanation) January 17, 2020

The new units also won't inherently be affordable by any means (though their proliferation could bring down rental prices on the whole if they significantly increase supply.)

Urbanation reports that, among the 71 new purpose-built rental buildings completed in the GTA since 2005, the average surveyed montly rent for available units during the fourth quarter of 2019 was $2,491.

This was excluding most utility costs and parking, and based on an average unit size of 751 square feet.

"2019 may be remembered as an important year in the history of the GTA rental market, as the progress made towards increasing supply could mark the beginning of a new era for rental housing development in the region," said Urbanation President Shaun Hildebrand of the Q4 2019 survey results.

"But it's critical that this momentum continues in the years to come in order to eventually bring the market into balance.