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Toronto approved 19,700 affordable rentals. Only about 1,600 have been built

Across Toronto, badly needed affordable rentals are being roadblocked by rising rates and shrinking margins, says head of city hall’s housing secretariat.

Thestar.com
March 22, 2023
Victoria Gibson

Toronto has approved more than 19,700 affordable rentals over the last six-plus years, but only about eight per cent -- or 1,617 units -- have actually been finished, a new database shows.

The numbers released by city hall on Tuesday, as part of a project dubbed the Housing Data Hub, include an accounting of all affordable rental homes in the development pipeline with approval from city council -- including projects that were considered under community benefit regulations or those given financial aid through city programs like Open Door or Housing Now.

The aim of the open data project, city officials say, is to improve “accountability and transparency” on the housing file, as Toronto has chased a target of approving 40,000 affordable rentals by the year 2030.

It’s nearly halfway to that mark, the new database shows, with a total of 19,756 affordable rental units getting city hall approval since the start of 2017.

But the lion’s share have yet to break ground. Construction has not started on 15,175 of those units. Another 2,964 units -- or 15 per cent of the approvals -- are in the works, but not yet finished. And while 2021 came with a surge of affordable rental construction starts, with 1,868 units breaking ground through the year, that momentum slumped to 836 in 2022.

The new data underscores the challenges at play in a city where even marquee city hall affordable housing efforts like Housing Now have been battered by years-long delays -- first attributed to the pandemic, and later, to forces like rising interest and construction costs.

While the head of city hall’s housing secretariat, Abi Bond, says one main goal has been building out a more robust pipeline of affordable rental development, she acknowledged that rubber stamps alone won’t make a tangible impact for rent-strapped tenants.

“Although nothing will ever be built that isn’t approved, it’s also true that you can’t live in an approval,” Bond said. As interest rates have risen, she says all kinds of housing projects have hit roadblocks, with their potential return on investment becoming slimmer. With affordable housing, she said there’s less of a profit buffer to begin with, meaning those sites are quicker to hit shaky ground.

“This is something we’re paying attention to,” Bond said, describing the current economic climate as “extremely difficult” for development. “Generally speaking, the city is seeing a ratio of two to one. For every two approved, one is built -- and that’s across all forms of housing.”

The stakes of bolstering Toronto’s rental supply are high, as the city is once again seeing thin vacancy rates and soaring prices. A recent analysis of rentals.ca data by market research firm Urbanation found the average one-bedroom listing in Toronto this February cost $2,501 per month -- a price-tag that requires earnings of at least $100,000 to be considered affordable.

Toronto’s chief planner, Gregg Lintern, says a large injection of new condos to the city skyline this year may also result in more rentals if investors snapped them up -- but acknowledged that newer supply likely wouldn’t add anything affordable to the rental sphere.

The city’s definition of affordable rentals can vary widely, from a deeply subsidized unit that can provide a home to the city’s lowest income residents, to a rental unit listed at exactly the average market rate. This year, Toronto’s average market rent for a bachelor apartment is $1,317 per month, rising to $1,538 for a one-bedroom or $1,811 for a two-bedroom.

That average is less than the listing average, as it takes into account rents paid by sitting tenants, including those who might have held onto their units for years and have been subject to rent increases only within an annual cap. But to comfortably afford a one-bedroom apartment at the current average market rate, a household would need to be earning at least $61,500 per year.

That’s likely still out of reach for many of the households waiting on Toronto’s years-long subsidized housing wait-list, which as of late 2022, had more than 85,500 households in line.

While the new database does not currently break down different levels of affordable housing in its overall tracking, Bond is already thinking about new additions -- saying that kind of detail could help the city get a fuller picture of “what we’re creating and who can afford the supply.”