This Note is part of a series of Notes on key City issues to update City Council at the start of its 2018 – 2022 term.
Toronto is a successful and prosperous city, and yet many low-to-moderate income Torontonians have increasingly limited access to safe, stable and affordable housing. Governments are challenged to provide sufficient investments to create new affordable housing opportunities. As the City prepares its housing strategy for the next ten years (2020-2030), an opportunity exists to focus government, non-profit and private resources on delivering innovative solutions with a significant impact on addressing the City’s growing affordable housing needs.
In 2019, a new Toronto Housing Strategy 2020-2030, will be considered by City Council. As directed by Council in July 2018, City staff have begun implementing a work plan under the direction of the Deputy City Manager, Community and Social Services including preparation of public and stakeholder engagement, completing a jurisdictional scan and housing market analysis, and planning an international housing forum. To address the diverse housing needs of Toronto residents, the housing strategy will look to high-impact outcomes by leveraging new federal and provincial resources, extending City investments and strengthening partnerships with the non-profit and private sectors.
Full implementation of Canada’s first National Housing Strategy, a $40 billion commitment, is being rolled out in 2019. The Canada Mortgage and Housing Corporation (CMHC) launched the Federal Co-Investment Fund in 2018 with the first funding applications currently under review.
In 2019, under the National Housing Strategy, the ten-year Canada-Ontario Bi-lateral Agreement, which outlines joint federal and provincial investments guided by the first three-year provincial action plan will also start. The City will need to adapt to new federal-provincial housing programs that reduce funding to the City while increasingly moving towards direct delivery. The new landscape will require coordination among federal, provincial and City housing programs.
Several City divisions and agencies deliver housing policies, programs, services and infrastructure. Divisions and agencies are guided by several aligned strategic policies affecting housing and homelessness such as Housing Opportunities Toronto: Affordable Housing Action Plan 2010-2020, the Toronto Seniors Strategy Version 2.0, the Toronto Poverty Reduction Strategy and the Housing Stability Service Plan.
Toronto’s housing system responds to challenges and pressures across the housing continuum illustrated below: from the need for emergency shelter beds, safe and legal multi-tenant houses, long-term care homes, supportive, transitional, social and affordable rental housing, to market affordability challenges.
Despite progress over the past decade to ramp up federal, provincial and local measures, residents continue to struggle to secure and maintain affordable, suitable and stable housing. Particularly hard hit are homeless and vulnerable residents, and lower-income tenants, facing high rents, low vacancy rates – at one percent, the lowest in 16 years – and the high cost of home ownership in Toronto (Canadian Mortgage and Housing Corporation).
Unaffordability is the key driver of core housing need in Toronto.
Toronto provides 90 percent of the public housing in the Greater Toronto Area and 37 percent of the total social housing in Ontario, well beyond its share of population or its share of the tax base. Social housing has been funded by all three levels of government – federal, provincial and the City – through a variety of different programs. However, reductions in federal and provincial government transfers that began in 2007 and continue annually until 2032 are placing significant pressure on the City’s budget.
The City anticipates that through the National Housing Strategy, federal funding will be kept at current levels. Without a commitment to maintain existing subsidies, the City is projecting reductions of $8.6 million in 2019, $20.0 million in 2020, and $18.8 million in 2021 with a three-year cumulative reduction of subsidies of $84.6 million.
The following pressures create significant challenges in the housing portfolio:
There is growing pressure to increase Toronto’s affordable and supportive housing targets and to provide lower rents (deeper affordability), both with resource implications. For example, In March 2018, City Council set a target for the creation of 18,000 new supportive housing units, 1,800 new units per year, over the next ten years to help people transition out of the shelter system and into permanent housing. In June 2018, Council asked the City Manager to review the definition of affordable housing under the City’s Official Plan. Currently, affordable rental housing and affordable rents are defined as housing where the total monthly shelter cost is at or below Toronto’s Average Market Rent (AMR) by unit type. Meeting increased targets and lowering rents will require innovative solutions and thoughtful consideration of City priorities.
The City is adjusting to changes to federal-provincial housing programs and anticipated cancellation of provincial programs such as Phase 2 of the Provincial Affordable Housing Lands Program. Inclusionary zoning would help increase the supply of affordable housing in Toronto and an inclusionary zoning policy framework will be considered by City Council in early 2019.
Redevelopment of Long-Term Care Home (LTC) sites will also contribute to the creation of complete communities including affordable housing, community hubs and co-located City services. While City Council has approved a plan to increase the number of beds in Toronto, some LTC operators, concerned about mandatory redevelopment, have signalled to the Province of Ontario their intention to relocate outside of the City, mainly due to the cost of land, or to cease operations rather than redevelop. If LTC operators close or relocated, this could result in a net loss of beds in the City.
The low and mid-range market rental housing segment of the housing continuum in Toronto is under stress given the City’s high rents, low vacancy rates and insufficient inventory. The new Provincial Government has cancelled the Ontario Development Charges Rebate Program launched by the previous government to stimulate the construction of mid-range rental housing. Instead, the Province of Ontario has now eliminated rent controls on new rental housing. The City’s complementary Purpose-Built Rental Development Charges Rebate Program, approved by City Council in 2018, was designed to dovetail with the provincial DCs program and will need to be reconsidered.
In 2009, City Council approved Housing Opportunities Toronto (HOT) – An Affordable Housing Action Plan 2010-2020, the City’s first ten-year housing and homelessness plan. Over the past decade, by implementing actions recommended in the HOT Action Plan, Toronto has taken significant steps to address a range of housing challenges faced by residents across the housing spectrum. Toronto’s ongoing housing advocacy has also contributed to the introduction of a 10-year National Housing Strategy by the Federal Government, the provincial 10-year Long-Term Housing Strategy, and Ontario’s Fair Housing Plan. Toronto’s affordable housing initiatives are also contributors to other City priorities such as poverty reduction and supporting seniors.
The following initiatives undertaken by the City are achieving or expected to produce high impact results to increase the supply and improve the oversight of affordable housing:
The City has commissioned a Toronto Housing Market Analysis by the Canadian Centre for Economic Analysis and the Canadian Urban Institute. A final report is expected in January 2019.