Mayor John Tory has sold his Housing Now initiative as a breakthrough that will kick-start his campaign promise to build 40,000 new affordable rental units in Toronto over the next 12 years.
At the most recent council meeting to discuss the city’s homelessness crisis, Tory boasted that his plan will add 10,000 new units to Toronto’s affordable housing stock by leasing 11 city-owned parcels of land to developers and non-profits.
On the surface, it looks like a promising plan that will boost supply in a city where the current rental vacancy rate is at less than one per cent. The city already owns the sites to be redeveloped, many of which are currently being used as parking lots and are near transit hubs. Sean Gadon, the city’s director of affordable housing, said the $4.2 billion spent on construction would create thousands of jobs.
Yet a closer look reveals that the proposal will hardly make a dent in the crisis.
For example, of the 10,000 new units planned, only one-third will be “affordable,” which according to the city’s definition is 80 per cent of average market rent. Of those, only 10 per cent will be considered affordable at 40 per cent of market rent. In total, only around three per cent of the units would be considered affordable for low-income Torontonians.
Another third will be market rent (the average rents for a one-bedroom varies from the city’s figure of $1,270 to as high as $2,300, according to Padmapper) and the remaining will be sold as condos.
Despite a number of councillors calling on the city to mandate a higher percentage of affordable housing, Tory’s plan passed 22 to 4.
“For a moment, our hopes were through the roof when we heard about Housing Now,” says Alejandra Ruiz-Vargas of ACORN Toronto. “But when we got into the details, our hope was lost.”
At council before the vote, Tory cautioned his colleagues that developers would be discouraged from bidding on the projects if the city were to mandate more affordable housing. “It’s like a Christmas tree,” Tory said. “If you put too many ornaments on it, it’s going to fall over eventually.”
But according to Martine August, a former housing policy advisor to Kathleen Wynne, private developers should have never been involved to begin with. Since the land is part of the city’s collective social wealth, it should all be affordable with rents geared to income, says August.
“When we’re in an affordable housing crisis, worrying whether private developers can profit off it seems to me like we’re focusing on the wrong thing.
“There are non-profit and co-op housing organizations that could develop this housing on a not-for-profit basis,” adds August, an assistant professor of urban planning at the University of Waterloo.
August says that the city could have created a land trust under which the city could maintain ownership of the land.
It’s a model used by the Vancouver Affordable Housing Agency, which was created in 2014 to build rental housing for individuals and families on low to moderate incomes. The agency recently transferred seven city-owned sites to a community land trust to design, build and operate thousands of affordable homes and has over 2,000 other units currently in development.
Councillor Ana Bailão, Tory’s affordable housing advocate, said in a press conference that although Housing Now isn’t going to solve all of the housing issues, it’s a “big step in the right direction,” noting that other levels of government could eventually step up to create affordable units.
That seems unlikely.
In November, Premier Doug Ford scrapped rent controls on all new rental buildings, claiming the move will spur development.
But, as August points out, when Ontario did have an exemption to rent control for all units constructed after 1991, it did little to encourage developers to build rental housing. In fact, the Canadian Mortgage and Housing Corporation found rentals constitute less than nine per cent of all new units built since 1990.
“The private sector has had lots of time to prove whether they can provide affordable housing, and they can’t,” says August.
The province is also reportedly considering a proposal that would make it easier for landlords to evict tenants, even as renovictions and illegal personal-use evictions are on the rise.
With the city’s social housing wait-list currently at five to seven years, those experiencing homelessness and living in shelters don’t have any exit strategies. Low- and moderate-income Torontonians can’t find affordable rental units, while median-income households that could traditionally afford ownership are getting priced out.
Meanwhile, a new report commissioned by the city’s affordable housing office warns that “unremedied, the housing situation in Toronto will produce consequential challenges for equity, cohesion and economic prosperity in the city.”
The Housing Now initiative could’ve offered an opportunity. Instead, it’s a drop in the bucket.