Legacy high-rise apartment buildings constructed between 1960 and 1985 during Canada’s federally incentivized “apartment boom” are an enduring symbol of modernist development.
Once representing the social promise of high-rise living for upwardly mobile young singles and couples, and still an asset to our region, legacy towers have since fallen into disrepair and are now more emblematic of chronic social and economic disinvestment.
Inadequate housing is defined as housing in need of major structural repairs such as upgrades to defective plumbing, heating or electrical wiring. In 2016, based on self-reported estimates by tenants, 11 per cent of high-rise non-condo units in the city of Toronto, 9 per cent of high-rise non-condo units in Peel Region and 6 per cent of high-rise non-condo units in York Region were considered inadequate. Together, this affects 30,800 rental units: 26,700 in the city of Toronto, 3,700 in Peel Region and 400 in York Region.
Unsuitability or overcrowding, another indicator of core housing need, is widespread in the region’s high-rise towers.
When families cannot afford units large enough to accommodate their households, they have little choice but to compromise space by renting a smaller unit or “doubling up” with other households to offset rental costs.
Overcrowding is connected to a range of negative health outcomes in children and adults, including psychological distress, general physical health and respiratory infections. Overcrowded spaces can increase the risk of transmission and outbreaks of communicable diseases, as witnessed during the COVID-19 pandemic, where infection rates in Toronto were four times higher among people living in neighbourhoods with high levels of overcrowding.
In the city of Toronto, almost a quarter (23 per cent) of high-rise non-condo rental households are overcrowded. Peel Region has a slightly lower incidence at 20 per cent. York Region has the lowest percentage of overcrowded high-rise rental households in the region, but still a significant number at 12 per cent.
Despite their for-profit mandate, legacy towers provide lower than average market rents, making them a highly sought-after commodity for low to moderate-income renter households. The highest savings gaps are found in the city of Toronto, where high-rise tenants pay on average $149 or 14 per cent less for their monthly rent than other renters in the primary rental market.
In Peel Region, the difference decreases to $118 or 11 per cent less in monthly rent in favour of high-rise tower renters. This gap decreases dramatically in York Region, where high-rise tower renters pay on average $11 or one per cent less for their monthly rent than other renters in the primary rental market.
High-rise renters face rising costs amidst stagnating incomes
Notwithstanding these lower rents, tenants struggle to make ends meet as the gap between rental costs and incomes widens.
Across the Toronto CMA (census metropolitan area), high-rise renters’ average household incomes lag far behind the incomes of other renters and homeowners.
Between 1980 and 2015, the real average wage of high-rise renters increased by a mere 5.1 per cent compared to 40.6 per cent growth for homeowners over the same period. Almost half of all high-rise non-condo renter households in the Toronto CMA are low-income households, with before-tax earnings of $39,183 or less.
In Toronto, Peel and York, 49 per cent, 45 per cent and 57 per cent respectively of high-rise non-condo renters live on a low income.
Stagnant purchasing power coupled with rising rents means more tower residents are living in unaffordable housing.
Housing is considered unaffordable when it is equal or above the 30 per cent threshold of a household’s before-tax income. Between 1981 and 2016 across the region, the number of high-rise tenants paying more than 30 per cent of their income on rent increased to 48.9 per cent in 2016. Those operating at or above the 50 per cent benchmark experience deep unaffordability—forcing difficult budget trade-offs by leaving little room for other important expenses such as groceries, medical costs and transportation.
In the city of Toronto in 2016, 48 per cent of high-rise tenants paid over the 30 per cent benchmark, with half paying over the 50 per cent benchmark. The numbers are similar in Peel Region, where 48 per cent pay over the 30 per cent benchmark and 23 per cent pay over the 50 per cent benchmark. York Region has the highest rates of unaffordability, with 60 per cent of high-rise renters paying over the 30 per cent benchmark and 34 per cent over the 50 per cent benchmark.
While legacy towers provide relatively affordable options when compared against average market rents, for many renters, even these relatively lower rents remain unaffordable.
The relatively affordable rents offered by legacy towers are quickly disappearing as population growth via migration and immigration, unhealthily low rental vacancy rates, reduced homeownership rates and growing financialization widen the rental supply gap. Low supply and high demand place upward pressure on legacy units, increasing rents despite chronically poor conditions. Moreover, when upgrades and retrofits are advanced, building owners have few options but to raise rents to offset costs of repair.
Beginning in the 1990s and escalating since Real Estate Investment Trusts (REITs) and other investment companies such as pension funds and private equity firms have invested heavily in the region’s private tower stock.
To increase returns on investments, financialized landlords raise rents through “renovictions” while simultaneously reducing expenses, requiring tenants to pay more for lower-quality housing.
These practices are enabled by vacancy decontrol policy allowing property owners to increase rent by any amount once an existing unit becomes vacant.
Housing inequities are symptomatic of racism and discrimination
In the Toronto CMA, almost half (49 per cent) of all high-rise renter households are low-income and more than half of all high-rise renter households (54.1 per cent) are racialized or Indigenous peoples.
As an aggregate group, nearly half (47.3 per cent) of all racialized renters in the Toronto CMA live in a high-rise non-condo tower. Black (54.5 per cent), Filipino (53.1 per cent) and South Asian (48.2 per cent) households are the most likely to live in high-rise non-condo towers. The likelihood is significantly lower for white (38.4 per cent) and Indigenous renters (33.5 per cent).
Not only are racialized renters more likely to live in a tower, but they are also more likely than white renters to live in a tower in a low-income neighbourhood. The likelihood of living in a legacy tower in a low-income neighbourhood in Peel, Toronto and York increase for racialized renters, who are increasingly segregated not only by housing type but also by neighbourhood.
While much of the dialogue around affordable housing is focused on the development of new, deeply subsidized, below-market and private market purpose-built rental units, the maintenance and protection of existing affordable stock is an equally important prong of a more comprehensive strategy.
Addressing affordability and deteriorating conditions of legacy towers is not only a financial and market imperative but an equity imperative.
The private sector alone cannot respond to the dual challenge of affordability and repair of legacy towers. This is a public sector challenge that requires government, private sector, the philanthropic sector and community service organizations.
Excerpted from the United Way of Greater Toronto’s report, Vertical legacy: The case for revitalizing the GTA’s aging rental tower communities, in cooperation with Neighbourhood Change Research Partnership and Tower Renewal Partnership. This excerpt has been slightly edited for length. You can read the full report here.