Rachel Mendleson Headshot

Affordable Housing Canada: Housing Boom, Government Cutbacks Create 'Rent Squeeze'

Posted: Updated:
CANADA AFFORDABLE HOUSING RENT SQUEEZE
A growing body of evidence suggests that it has become harder for low-income households to put a roof over their heads. (Shutterstock photo) | Shutterstock

Rosie Da Silva feels like she has been “living on quicksand” for the past year, her future in the hands of politicians and bureaucrats with the power to uproot her on a whim.

The instability set in last fall, when in the midst of an austerity push at Toronto City Hall, Toronto Community Housing Corp. (TCHC), Canada’s largest social housing provider, proposed selling 872 of the single-family homes it operates to help it address its daunting $751-million repair backlog. Endorsed by Mayor Rob Ford, the unprecedented idea has threatened to put on the chopping block 619 occupied houses scattered in neighbourhoods across Toronto, where prices have skyrocketed in recent years.

Among those houses is Da Silva’s three-bedroom semi-detached in a leafy, residential block in Toronto’s east end, where the 66-year-old receptionist has lived with her family since 1981.

After receiving word of the news, she said, “People were furious. They were really angry.”

affordable housing canada toronto
Toronto resident Rosie Da Silva faces an uncertain future as the city's affordable housing stock heads for the auction block. (Rosie Da Silva photo)

Da Silva, who has developed strong relationships with her neighbours and has added handmade flower boxes to her front porch, is worried about losing everything she has built.

“We have been in a state of readiness, anticipating a possible move. So how does that feel?” she said.

Their anger did not go unnoticed.

In March, following a tenant-led campaign to prevent the mass sell-off, council voted to create a working group to find alternative solutions to TCHC’s funding problem. On Tuesday, the group’s recommendations, which include maintaining 564 of the occupied homes as affordable housing while supporting those who wish to transition to ownership, will be presented to the mayor’s executive committee. (The working group recommends that TCHC proceed with the sale of 55 stand-alone properties valued at more than $600,000.)

“It’s a far cry from where we were in October of last year,” Da Silva said. “I’m hoping that it gets through.”

The drama unfolding in Toronto is part of a larger trend playing out in many major Canadian cities, where a growing body of evidence suggests that it has become harder for low-income households to put a roof over their heads.

STORY CONTINUES BELOW SLIDESHOW

Close
The 10 Most Expensive Cities To Rent In Canada
of
Share
Tweet
Advertisement
Share this
close
Current Slide

According to Michael Shapcott, Director, Affordable Housing and Social Innovation at the Wellesley Institute, the shift to building condo towers rather than apartments, limited government funding and a boom in house prices that has far outpaced average income growth has created a “severe shortage of affordable housing.”

Shapcott points to the waiting list for subsidized rental units in Toronto (the bulk of which are TCHC-operated) as proof of this rising demand: In August, the queue surpassed 86,000 households to set a new record.

Shapcott said there have been “steady federal cuts in affordable housing investments” following the federal Liberals’ dismantling of Canada’s social-housing strategy in the 1990s, and the termination of permanent federal funding for new affordable housing.

This state of austerity has been “business as usual” with the exception of the 2009 federal stimulus budget, which included $2 billion over two years for affordable housing, “the biggest chunk of new affordable housing money we’ve seen in two decades,” said Shapcott.

Based on the latest corporate plan by the Canadian Mortgage and Housing Corporation, a recent Wellesley Institute report noted that the number of households assisted under federal housing programs will drop to 525,000 by 2016, a decline of almost 100,000 since 2008, before the recession hit.

“What it means in practical terms is that very little new affordable housing is being built, and people in existing social housing and private housing are increasingly facing run-down, decrepit facilities that are bad for their health and bad for the community,” Shapcott said.

The shortage of affordable housing is particularly acute when it comes to family units, as developers favour one-bedroom condos over larger apartments, according to Dallas Alderson, director of policy and programs at the Canadian Housing and Renewal Association (CHRA).

Despite the fact that one-third of households in Toronto and Vancouver were renters in 2006, rentals accounted for less than seven per cent of all residential housing starts in Toronto in 2010, and just over five per cent in Vancouver, Alderson said. (Some condo units not counted as rental starts in these cities will be rented, however.)

On a national level, she said the vacancy rate was just 2.2 per cent In October 2011, down from 2.6 per cent the previous year.

“Developers are much more interested in developing ownership properties,” she said. “Rental stock has been not keeping up with demand.”

As availability has declined in Canada’s major urban centres, so has affordability. While the average rent for a two bedroom apartment in Calgary increased by five per cent from 2009 to 2010, the median income shrank by 3.7 per cent, she said. The CHRA observed similar patterns in Winnipeg, Regina and Vancouver. The “rent squeeze” is also on Halifax, where Open File reported earlier this year that rents are growing faster than wages and assistance.

Tsur Somerville, director of the Centre for Urban Economics and Real Estate at the University of British Columbia, said rising income inequality in Canada and zoning restrictions in urban areas have also increased the competition for housing as a wealthy minority is better equipped to snap up real estate.

(As The Huffington Post reported last year, several U.S. studies have shown that a growing gap between rich and poor can erode affordability, particularly in tight housing markets, because, as one Duke University economist put it, “When the rich get richer, they bid up the price of things that everybody else wants, too.”)

“For poor households, the way the last two decades have evolved in housing markets has created challenges for them, and strains on their budgets,” Somerville said.

But in the context of the TCHC, he said the proposal to sell single family houses to pay for capital repairs “is not necessarily a bad idea.”

While these dwellings may be preferable to tenants and foster more eclectic neighbourhoods, he said they are a “relatively inefficient way of providing single-family housing,” particularly at a time when the repairs are so badly needed.

“There is this worship at the altar of neighbourhood diversity that sometimes gets a little bit excessive,” he said.

“Throughout history, the rich have not lived with the poor.”

As cities across Canada pursue different strategies for addressing the affordable-housing dilemma, most observers agree that funding is the primary barrier to addressing the issue.

“Ontario needs a long-term funding commitment from the federal government that is fair to Ontarians and will help meet the needs of our communities that depend on sustainable funding,” said Kelly Baker, spokeswoman for Minister Kathleen Wynne, whose portfolio includes municipal affairs and housing.

To that end, some see Bill C-400, a private members bill introduced last winter by NDP MP Marie-Claude Morin, as a glimmer of hope on the horizon. Slated to be debated in the House of Commons this month, the bill aims to “ensure secure, adequate, accessible and affordable housing for Canadians.”

Whether the idea wins approval from the majority of MPs, which are now more heavily weighted toward the governing Conservatives, remains to be seen. As a general rule, private members’ bills only rarely pass. But Shapcott said “the attempt to bring some visibility to these issues at the national level” is a step forward for Canada, which is the only G8 country without a national housing strategy.

In Toronto, meanwhile, TCHC president and CEO Gene Jones said the working group report to be presented on Tuesday has “clearly framed” the challenges facing the organization.

“We need more money for repairs, we need new sustainable sources of money, and we need it soon,” he said in an email. “Doing nothing is not an option, and so we welcome these suggestions for new revenue and look forward to continuing to work with the city to address the capital repair backlog.”

He said the tenants who live in the 55 stand-alone properties recommended for sale by the working group have been notified. Affected tenants would be given at least five months notice if city council and the province approved this recommendation, he said.

“We will work closely with all affected households to accommodate them within an appropriate stand-alone unit in our portfolio or connect them with affordable homeownership opportunities,” he said.

As for Da Silva, whose home is not in that group, she has not seriously investigated other housing options. As one of the few TCHC tenants who pays market rent, she said she would be left to figure it out on her own if the mass sell-off proceeds. She assumes she would have to pay significantly more, for much less.

But she is optimistic about the report’s recommendations, which were drafted in consultation with tenants. In particular, she is excited about the proposals for new models of affordable housing in Toronto, such as non-profit management and community co-operative land trusts, which would take decisions about specific properties “away from the whims and fancies of people who have a different philosophy.”

“This is about more than me,” she said. “It’s about keeping these homes, in perpetuity, as affordable housing.”

Also on The Huffington Post

Close
Least Affordable Cities For Housing
of
Share
Tweet
Advertisement
Share this
close
Current Slide

Suggest a correction

Around the Web

Council approves Vancouver's affordable housing plan

Don't concentrate affordable housing in one place

Housing struggles affecting low-income First Nation people in Thunder Bay

Governments of Canada and Ontario Celebrate New Affordable Housing in Clinton

Habitat for Humanity Canada and The MasterCard Foundation partner to expand ...