Toronto's next mayor must be 'really focused on implementation' to build affordable housing, prof says

With a little more than a week to go in Toronto’s mayoral election campaign, the top-polling candidates have all revealed their plans to tackle the growing housing affordability crisis in Toronto.

All candidates have promised to find ways to boost housing supply. Many have proposed finding more efficient ways to build affordable housing on vacant, city-owned land. Speeding up the notoriously slow permitting approvals process is another popular promise. Some have vowed to stand up for renters by setting higher targets for purpose-built rentals and halting the demolition of older, rental apartment buildings.

The candidates all agree that housing needs to be more affordable in the city and some have floated ways the city can contribute to getting more affordable units built.

Frontrunner Olivia Chow says she will raise Toronto’s vacant home tax from one to three per cent to pay for more affordable housing. Josh Matlow said his housing strategy, which includes boosting the number of affordable units in the city, will be funded mainly by savings from not rebuilding the elevated portion of the Gardiner Expressway east of Jarvis Street.

Mark Saunders says he will take property tax off of affordable housing units in future developments. Anthony Furey's platform does not specifically address funding more affordable housing units but he has vowed to eliminate the municipal land transfer tax for first-time homebuyers as a means of improving affordability.

"Rescuing and accelerating” the city’s Housing Now program, which aims to make city-owned land available for affordable housing, is a pillar of Brad Bradford's housing plan.

Ana Bailão says her housing plan will be funded with proceeds from an existing city building tax levy, resulting in 285,000 new homes by 2031. She has indicated that 20 per cent of those units will be delivered as part of purpose-built rentals.

Mitzie Hunter, who plans to fund more affordable housing units and other promises in her platform with a six per cent property tax hike, said her plan does not rely on other levels of government.

“I will not build my plans on hopes and wishes and magical thinking,” she declared during a campaign announcement.

• Here's what Toronto mayoral candidates are promising

But when it comes to tackling housing affordability in Toronto, ideas tend to be bountiful, while money is scarce.

'ALL HANDS ON DECK'

Matti Siemiatycki, the director of the Infrastructure Institute at the University of Toronto and a professor with the department of geography and planning, said the incoming mayor and current city council will realistically need an infusion of cash from the provincial and federal governments to catch up on building the affordable housing the city desperately needs.

“They can’t solve the housing crisis alone,” he said in an interview with CP24.com. “This is all hands on deck. All orders of government plus the private and non-profit sectors.”

He noted that the city itself is in a “fiscal crunch” as it copes with a $933 million shortfall in its 2023 budget due to COVID-19 costs and billions of dollars would be required to build the tens of thousands of affordable and deeply affordable units that are needed in Toronto.

Siemiatycki said programs like Housing Now illustrates how even the “best laid plans” can flounder.

Since the Housing Now program was approved in 2019, construction has not started on any of the sites that have been rezoned for future projects. The city, however, says that it is making “good progress” with construction slated to begin in July at a site at 5207 Dundas Street West and on two other sites by the end of 2023.

“We are really in a crunch on the cost side of the equation,” he said.

“Even if the permitting is easier, the cost of building these units is high and inflation and interest rates, the combination of those two, have made the economics really challenging… Even essentially coming up with ways of giving the land for free does not make the units particularly affordable, if it is publicly owned land.”

Housing affordability has unsurprisingly become a central issue for many Torontonians in this election campaign. In fact, one recent CP24.com poll found that the cost of housing was the top issue for nearly 40 per cent of respondents. Public safety was a distant second (23 per cent).

“Housing is at the core of a variety of different challenges that our city is facing; issues around mental health and addiction, issues around public safety, issues around public transit,” Siemiatycki said.

He added that the sting of housing unaffordability is being felt “widely” in the city.

The cost of a one-bedroom rental, for example, was up 17.5 per cent year-over-year in June, according to Rentals.ca data.

“It is being experienced by homeowners who are experiencing higher interest rates, by renters, who are seeing their rents skyrocket, especially if they are in units where rent control is removed,” he said.

“It is being experienced by those who are the most vulnerable, who can’t find anywhere to live and those who are coming here who are struggling to find a viable and safe place to live.”

A person walks by a row of houses in Toronto on Tuesday July 12, 2022. THE CANADIAN PRESS/Cole Burston

Siemiatycki said on the policy side, the municipality plays a “big role” on the housing file.

 

He noted that the recent decision of city council to allow multiplexes in all Toronto neighbourhoods is a good example of a policy that works to solve multiple challenges.

“What the multiplex does is it allows for gentle intensification of our neighbourhoods, growth in population in neighbourhoods that have been shrinking, the ability to make them much more vibrant and lively and in so doing, also making public services more efficient and cheaper to provide and making important public transit potentially viable in areas where the density of population couldn’t support it,” he said.

But he noted that while these multiplex units will increase supply, they likely won’t address the affordability problem.

“Because of the cost of construction, units are not going to be affordable units unless there are subsidies and financial support in order to do it. The cost of building a multiplex means that the rents to cover the conversion costs are likely to be at least at market rates,” he said.

Simply focusing on increasing supply, Siemiatycki said, will not fix the urgent need for affordable housing.

“The idea of trickle down supply that will lead to affordability, that is a decades-long process and requires huge amounts of supply and getting that amount of supply built in our environment is a challenge,” Siemiatycki said.

“We can’t wait for supply to come on the market and hope that that will ultimately, over the long term, lower prices. We are in a much more urgent moment than that.”

He said Toronto needs a mayor who can bring “other orders of government into the fold.”

“I mean (the federal and provincial governments) have their own financial troubles and their own interests and solving problems in Toronto is only part of their mandate," he said.

“So it’s been really a challenge that has been building up for decades and kind of untangling it is going to require someone who is both really focused on implementation and a good negotiator and can make a compelling case.”

Siemiatycki said it was a robust federal program that boosted the construction of rental buildings in Toronto back in the 1950s, 60s and early 1970s. Those units make up much of the city’s current rental stock.

“There were federal programs to support private development, there were programs to support coops and even to some extent, to support public housing and non-profit housing,” he said.

“So we’ve done this before. The federal government does have their national housing strategy but it needs to just be ramped up and accelerated and done in concert with the municipalities and provinces to really start getting to scale, which is absolutely what we need right now.”

He said all levels of government need to come together to find ways to make sure any boost in supply includes units that are suitable for families.

“The economics and the business imperatives point towards higher cost units and… smaller units too, units that are typically bachelor or one bedroom, so once again posing challenges for where families are going to live,” Siemiatycki said.

“Really that’s where the policy piece comes in and where public funding is going need to augment the private investment in order to make sure there are affordable units and deeply affordable and supportive housing with wrap-around services, and that the mix of units, supports a complete community.”

AFFORDABILITY SHOULDN'T BE BASED ON MARKET RENT: PROF

Nemoy Lewis, an assistant professor in the School of Urban and Regional Planning at Toronto Metropolitan University, said campaign promises to boost funding to the city’s rent bank, a program that provides support to Toronto residents who are behind on their rent, are misguided.

“At the end of the day we are essentially putting money in the pockets of the very people that are perpetuating the problem that got us here, that is making housing unaffordable,” he said.

He noted that the city should be using all available resources to build housing that is truly affordable.

“We need to make sure that we are building housing that people can actually afford and not building housing where we are defining affordability based on area market rent, which we know is vastly unaffordable,” he said. “80 per cent of area market rent is still unaffordable for a vast amount of people in Toronto.”

He said this is especially important as the city loses older, purpose-built rental apartments to developers who are demolishing them to construct new buildings.

He said current rules in place by the city do not ensure that new affordable units will stay affordable.

“(We need) housing that is either managed by coops or non-profit housing providers to ensure that this housing is made affordable for the long-term and not just some Band-Aid fix,” he said.

Lewis said addressing the housing affordability crisis in Toronto should be “the most important issue” for mayoral candidates right now.

“Folks have been complaining for decades about how unaffordable this city is,” Lewis said.

“The concern that I have is if we continue to allow this issue to linger and grow even larger… major urban centres like Toronto will become vastly unaffordable and this will essentially help generate more income-polarized cities where only the wealthy households can afford to live.”