Toronto to review definition of ‘affordable’ housing

Thestar.com
July 26, 2018
Jennifer Pagliaro

The city of Toronto will review how it defines “affordable” housing in its next term after a debate on Mayor John Tory’s signature housing program, which has been criticized by housing advocates.

A successful motion from Councillor Josh Matlow at a council meeting this week asked the new city manager to review what the city considers affordable housing under its official plan.

A successful motion from Councillor Josh Matlow at a council meeting this week asks the new city manager to review what is considered “affordable” housing under Toronto’s official plan.

“The definition of affordability according to our official plan doesn’t actually reflect the reality of affordability for many Torontonians,” said Matlow, who chairs the city’s tenant issues committee. “More and more people in our city don’t consider market rent affordable.”

The vote came as council approved 606 new rental units secured through the Open Door program, which offers land, tax and other incentives to developers in order to secure certain rents over several years. In 2017, when 1,224 rental units were approved, those incentives totalled at least $128 million.

The city currently defines affordable housing as anything at or below average market rent. That average market rent comes from an annual survey by the Canada Mortgage and Housing Corporation, which looks at all occupied units. In 2018, the average market rent for a one-bedroom was $1,202 a month and $1,426 for a two-bedroom unit. The Open Door program secures a rent level for a period of time, typically ranging from 25 to 50 years.

Because the CMHC survey scans units that have been off the market for several years rather than the current asking price, setting rents at average market rent provides a modest discount. For example, in September 2017, the city reported that average market rent for a one-bedroom unit was $1,137, compared to the average asking rent, which was $1,614, meaning the difference in rent for a one-bedroom “affordable” unit in 2017 was $477. The different was $911 for a two-bedroom unit.

The city has also secured rents below average market rent, in some cases with the help of housing subsidies provided through programs paid for by the other levels of government. In 2017, 47 per cent of units were approved at 90 to 100 per cent average market rent; a third were secured between 80 and 90 per cent average market rent; and just 20 per cent of all the units were secured at a more affordable 40 and 60 per cent of average market rent.

Housing advocates have said the standard of using average market rent still remains out of reach for many, as rents continue to rise.

The city has reported that incomes of more than $50,000 would be needed to afford a unit at 100 per cent average market rent, using the long-standing principle that an individual or household should spend no more than 30 per cent of their income on housing.

More than a third of Toronto households earn less than $50,000 annually before tax, according on a sample taken from the most recent census data from Statistics Canada. And more than a third of all homeowners and renters are spending more than 30 per cent of their annual income on shelter.

Council also agreed to have the city manager conduct a value-for-money analysis of the 606 rental units approved in 2018 under the Open Door program.

“I just want to make sure that if we are going to be spending money, if we’re going to be using tax dollars, land, etcetera, that we’re actually making a difference,” Matlow said.

Tory said he was “more than happy” to see a value-for-money analysis conducted and reiterated his support for reconsidering what the city defines as “affordable.”

“I think this is a significant step forward and it does prove that when we get the co-operation and collaboration of the private sector, the non-profit sector and the city government then we can actually do better than what we were doing,” he said of the Open Door program. He noted, however, that it’s still “nowhere near good enough.”