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‘Everybody in the middle is getting squeezed out and it’s painful’: Toronto’s lack of affordable housing hits those in higher income brackets, say experts
By Tess Kalinowski Real Estate Reporter Mon., Dec. 28, 2020 timer7 min. read
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When Bonnie Heath bought her modest Scarborough bungalow 20 years ago for about $200,000, she was earning $38,000 a year.
Even though she is now making only a little more money — about $44,000 annually — she figures the house would sell for about $1 million.
“There’s no way I could do it if I was starting now,” said Heath, 67. “Technically, I can’t afford my house now.”
She has worked for 30 years for an agency that helps families of children with developmental disabilities. Her house was purchased with the proceeds of the sale of the home she shared with her husband and three children. Child support helped her pay off the mortgage, she said.
Sometimes it felt like a struggle, but the house has given Heath the kind of secure home that has become increasingly difficult to afford for people in her income bracket.
She is among a cohort of about 330,000 Toronto workers earning between $40,000 and $60,000 annually. They are the personal support workers, daycare and factory workers, social workers and dental assistants who keep the city running. About 90,000 perform the kind of essential jobs that have helped Toronto weather the pandemic.
But their inability to afford a home in the city has become a critical issue that risks not only the wellbeing of vital workers, but Toronto’s vitality and diversity, say experts.
“It’s an issue that’s been on the fringes for decades — finding housing that’s big enough for your whole family and in a neighbourhood where you can walk to work and is near a park. It’s always been a struggle,” said Michelle German, vice-president of policy and strategy at WoodGreen.
“What’s happened is that now the majority of people are struggling — and that’s new.”
As housing demand grows and home prices continue to soar, even throughout the pandemic, wages have failed to keep pace.
In 1990 the average Toronto home cost four times an average income. Now it costs 15 times the average income. Rents have risen twice as fast as income, according to research from WoodGreen and the Toronto Region Board of Trade.
They have issued two joint reports this year urging action on what they say is a crisis in attainable or workforce housing.
But the challenge of affordability extends to higher income brackets too.
Research provided by the board of trade shows someone has to earn $76,000 to afford a one-bedroom apartment that costs $1,922. You need an income of $101,000 to afford a two-bedroom unit — based on keeping housing costs at 30 per cent of pre-tax earnings, a common measure of affordability.
As Toronto works toward a goal of creating 40,000 affordable rentals by 2030, there’s a growing call to house those whose income is too high to qualify for Toronto Community Housing Corp. units — even if there were any available — but not high enough to pay market prices.
“We’re moving forward into a city that’s only available for the very rich or those in poverty who are eligible and can access government programs and community housing,” said German of WoodGreen, one of Toronto’s largest non-profit housing providers. “Everybody in the middle is getting squeezed out and it’s painful.”
Workers are increasingly being pushed further out of the city where they cope with onerous, expensive commutes.
Heath said she’s been saving about $200 a month since the pandemic because she is no longer commuting to the Parent Outreach Program offices near Danforth and Jones Avenues. Moving closer to work isn’t an option because downtown housing is more expensive and she wants to stay near her daughter, Jenny, 35, who has Down syndrome.
Jenny, who has been living in a group setting, has friends and contacts in the community. She receives an income from the Ontario Disability Support Program. Heath would like to find a way to renovate her own basement so that, when she dies, Jenny and a roommate could stay in the home and the upstairs could house a support worker.
Through her job, Heath said she sees a lot of families living in one- or two-bedroom apartments, sometimes with three and four children.
“They’re all jam-packed into these relatively small places. If a child has autism, they need more space to get away from people and calm themselves down and there’s just no space for that,” she said.
In some cases both parents work, but if one is looking after a child because they can’t afford daycare, “It’s really tight,” said Heath.
Addressing the attainable housing shortage will need all three levels of government, the private and non-profit sectors, said deputy mayor Ana Bailao. She said Toronto’s new definition of affordable housing, expected to be formalized next year, should help create more housing that workers can afford.
Until now, an affordable unit was one that rented for below the average market cost. The new definition incorporates household income into the measure of affordability — specifically housing that costs no more than 30 per cent of gross household income.
In the past when you talked about affordable housing it was assumed that the city’s workers were able to buy or rent, said Bailao, the city councillor for Davenport.
“This is not the case anymore,” she said. “When you’re talking about actions on the spectrum of affordable housing you now have to look at a larger spectrum of income that you need to take action on.”
Her ward is home to Canadian gaming developer Ubisoft. When she attends events there, Bailao said she often talks to the workers.
“They love the community, they love working here but they would love to live here as well and they’re having a tough time doing that,” she said. “That’s an issue.”
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The city and other levels of government have been unlocking public lands for affordable housing development but developers say it is a challenge to scale below-market-rent projects so they are economically viable.
Toronto’s former chief planner Jennifer Keesmaat has partnered with Jason Marks, formerly of Shiplake Properties and TD Bank in a new development venture designed to hit the sweet spot on affordable housing.
Its aim is to help not-for-profits, including faith groups and institutions like universities create affordable housing that fits with their mission and needs.
Markee’s financing, construction and planning model will scale up affordable rental, said Keesmaat.
“Rather than delivering 20 or 30 units, we want to build hundreds of thousands of homes and we want to access private capital to do that,” she said.
“With the right partner we can actually build 100 per cent of our housing at 50 per cent below market (rent), as an example,” she said. “It would be a partner who has land who doesn’t need a return from that land.”
The company’s first project is called Tyndale Green, which will be built on Tyndale University, a campus on Bayview Avenue near Finch Avenue. Keesmaat calls it “a complete walkable mixed-income rental community that will be 50 per cent attainable-affordable housing and 50 per cent market housing.”
The number of units and community amenities aren’t finalized, pending consultations, but she expects the development will include an affordable daycare, a café, a bookstore and some type of community hub. Keesmaat said a formal development application should be filed in April.
“Any private developer could do what we’re doing but they would need to take less profit and most development companies are structured to maximize profit so they would need to restructure their mandate,” she said.
WoodGreen, one of the largest non-profit housing providers in the city, has been talking about the risks of inaction since it issued its first report in early 2020, said German. A third report is expected early in the new year.
“This is a problem that the private sector has historically solved and what we’re seeing are folks like myself from the community housing sector getting engaged because the private sector is no longer producing housing people can afford,” she said.
The high cost of land, the time it takes to build housing, the cost of labour and materials — it all adds up to housing that is affordable only to the weathy and investors, she said.
“The argument that profit is the most important thing is one that’s very toxic,” she said. “Of course, it’s got to net out and work for everyone.”
But we have to ensure we are also building the right kind of community that has a place for everyone, Keesmaat added.
“It’s important to note that New York City works, to the extent that it does work, because it does have a significant amount of affordable housing. Toronto has an enormous gap in our housing supply,” she said.
In cities like San Francisco where housing is so far above the means of workers, there are robots making hamburgers, said German.
In Toronto, restaurants are already folding up and moving out. COVID has pushed artists out of the city, she said.
“We’re seeing neighbourhoods full of McDonald’s and other generic places. We’re losing vibrancy,” said German.
Tess Kalinowski is a Toronto-based reporter covering real estate for the Star. Follow her on Twitter: @tesskalinowski