Toronto needs real affordable housing, not more luxury rentals
Posted September 23, 2021
Posted on September 13, 2021
Authored by Barbara Celestine and Bob Murphy
If anything, the pandemic has reinforced the vital role of governments in protecting people’s right to housing. With a federal election upon us, it’s time to make sure all parties do more to build and protect affordable housing.
Toronto has been well-known for its housing crisis which worsened during the pandemic. The irony is that instead of federal policy solutions aiming at building affordable rentals, we are seeing the exact opposite.
National Housing Strategy (NHS) is touted as a $70-billion plan out of which the Canada Mortgage and Housing Corporation (CMHC) — the federal housing agency itself — is spending $3.7 billion over a 10 year-period (2018-19 to 2027-2028) to create “affordable housing.”
But a scan of multiple developments funded under this program, especially the Rental Construction Financing Initiative (a key NHS program), shows that billions are going into pockets of developers to build more unaffordable rentals.
This is because rents offered in developments funded through these programs are based on median household income which in most cases is 30 per cent of median household income of the area where the development is taking place (in this case Toronto). In some cases, it is at best 21 per cent of median household income in the area.
For example, a $35 million low-cost loan was given to 2346 Weston Road Inc. to build 126 new rental units as part of a 15-storey development located at 2346 Weston Road, in North York. This is abuilding targeted for seniors with only one elevator!
Based on CMHC funding criteria and taking the annual median household income of $83,020 for Toronto, the rent in most of these developments in Toronto would be around $2,076 which is 41 per cent more than the average market rent of $1,467. Even if we go by “deeply affordable” rent definition followed under these NHS programs, the monthly rent will still be close to $1,500 which no senior can afford.
It’s important to note that CMHC itself defines housing as affordable when an individual pays no more than 30 per cent of their household income on rent.
Even the period for which affordability is to be kept is extremely minimal — in most cases 21 years.
On Sept 1, as part of the National Day of Action on housing, Toronto ACORN members marched to the development site of 2346 Weston Rd. to demand a minimum of 1.2 million units of affordable housing in the next decade. ACORN is calling for all public money funding creation of “affordable housing” to support tenants who are in core housing need.
Most people in core housing need — those with unsuitable, inadequate or unaffordable housing — have an income below $30,000 per year (Census, 2016). Going by CMHC’s own definition, for anyone who earns less than $30,000, rent should be no more than $750/month.
Developments that get support must be required to guarantee affordability for perpetuity. Also, CMHC needs to develop a non-profit acquisition strategy by funding and giving non-profits and co-operatives the right of first refusal on all apartment building sales and providing them resources to participate in the market.
Equally important is to protect existing affordable housing. Real Estate Investment Trusts (REITs) and big corporate landlords are eroding Canada’s affordable rental housing by buying up affordable housing, pushing out long-term tenants. Yet, governments are incentivizing billionaire landlords. The tax exemptions to REITs must end by closing the tax loophole in the Income Tax Act.
A rent relief fund is needed so that people falling through the cracks are not evicted for not being able to pay rent. The pandemic is not over yet, millions are homeless or on the verge of eviction. ACORN wants federal leadership on housing. The time is now.
Barbara Celestine and Bob Murphy are members of the Weston Chapter of Toronto ACORN. ACORN Canada is an independent national organization of low-and-moderate income families with 140,000+ members in 20+ neighbourhood chapters across nine cities.