On Toronto’s Move For More Affordable Housing

With sky-high real estate prices, extremely limited supply, and a vacancy rate incomparable to its international competitors, Toronto is in the midst of a housing crisis. Housing, transit, and affordability were the key issues for politicians in last year’s Mayoral and Council elections. 

Toronto Mayor Pushes Housing Now Plan

Incumbent Mayor John Tory made tackling the housing supply issue a key commitment if re-elected, and many City Councillors emulated that promise. A week ago, the Mayor successfully persuaded his Council colleagues to endorse his Housing Now Plan and to vote it through. The plan is an aggressive measure being heavily pushed through by the Mayor and senior City bureaucrats. 

The Housing Now plan calls on the City to facilitate the transfer of surplus land to private sector partners so as to develop it into housing. A certain amount of the finished units are to be set aside as affordable units with controlled rent. This is geared to benefit low income families. Toronto has a massive list of individuals and families waiting for affordable housing. In total, the plan is expected to result in 10,000 new units of real estate.

As Toronto has a weak Mayor system, its Mayor does not have executive powers and serves more as a glorified City Councillor acting as the Chair of Council. Unlike many of his American and international counterparts, he has no veto over votes, and cannot directly replace the departmental heads of the City’s large civil service. 

Officials have been eager to push the plan through given its importance, and this effort has been largely supported by City Councillors. The Housing Now plan was opposed by many of the city’s more left-wing politicians, who believed it did not go far enough and that its targets and limitations were not ambitious enough.

All levels of government will continue to increase their intervention in the real estate market so as to spur more development for an increasingly impatient pool of prospective buyers.

 

On The Next Mayor Of Toronto

The 2018 Toronto Mayoral election is fully on with the entry of Jennifer Keesmaat into the race.

Toronto’s former Chief City Planner from 2012 to 2017, Keesmaat was well known for her strong voice and outspoken style, unlike other high level public servants. Most expected a quiet, dull race due to the lack of a high profile opponent, with incumbent John Tory set to comfortably win a landslide.

Keesmaat’s “City Building Vision” Agenda

Keesmaat is positioning herself on the left of the political spectrum, in opposition to Tory’s centrist and slightly right-leaning agenda. She is campaigning on an ambitious, positive, expansive ‘city building vision’ agenda with new spending and a bigger role for municipal government. Her first major announcement was a pledge to build 100,000 affordable housing units over 10 years. In response Tory argued that over 20,000 units are under construction now, and that Keesmaat’s office failed to approve a single unit of affordable housing.

Keesmaat Pledges More Affordable Housing

A Keesmaat administration would likely increase spending on affordable housing, shift property taxes up above inflation (Tory has never increased them beyond inflation), and would emphasize enhanced densification, pro-cycling policies, and public transit. Keesmaat’s emphasis on affordable housing will make real estate a crucial and dominant issue in the race, which will good for observers and the housing minded. Although Tory is expected to hold on to power, many high-profile Mayoral incumbents have recently lost re-election; Denis Coderre, former Mayor of Montreal being one of them. An interesting and passionate election is incoming.

Is Affordable Housing A Human Right?

Is Affordable Housing A Human Right?

Prime Minister Trudeau

Prime Minister Justin Trudeau announces the government’s National Housing Strategy at the Lawrence Heights Revitalization Project in Toronto. (Photo Source: https://pm.gc.ca/eng/photos).

Prime Minister Justin Trudeau seems to think so, and recently declared that the federal government would make “adequate housing” a right in Canadian law. At the same time, the Prime Minister announced a $40 billion plan over 10 years to a national “Human Rights-Based Housing Strategy.”

What Is The Rights-Based Housing Strategy?

The strategy has several components, first the government will provide $2,500.00 in annual rent support a year for low-income vulnerable families called the Canada Housing Benefit. Second, more social housing will be built across the country. Third, 100,000 new affordable housing units will be completed, along with repairs to 300,000 affordable housing units, and removing hundreds of thousands of households from “housing need.”

The plan is also geared to “protect” 385,000 households from losing their affordable housing (social housing), and commits to cut chronic homelessness in the nation for 50%. The aforementioned Canada Housing benefit will cost $4 billion over 8 years with cheques starting to get mailed in April 2020 until 2028, shortly after the next federal election in late 2019. The Canada Housing Benefit is the only part of the overall strategy that is receiving new government money, most of the funding for the $40 billion plan was announced in last year’s federal budget. The plan will also see certain federal lands transferred to private sector partners for housing development if they meet strict environmental standards.

Does This Mean Housing Prices Will Start To Cool?

While stakeholders and expert groups say the plan will have a positive impact on disadvantaged, low-income Canadians, the overall state of housing affordability for middle class Canadians will continue to worsen. The below graph outlines average family incomes and average home prices in some of Canada’s major cities. Overall, as supply constraints and price increases continue, first-time buyers will have to save and leverage more to afford their first home.

2017 mEDIAN fAMILY iNCOME VS. oCTOBER 2017 AVG HOUSE PRICE ACROSS CANADA

Source: CREA, StatsCan, Bank of Canada