Toronto City Council today unanimously approved the “Implementing Tenants First: A New Funding Model for Toronto Community Housing” report that outlines the new permanent funding model for Toronto Community Housing Corporation (TCHC). The new funding model provides funding stability while increasing overall funding that includes dedicated allocations for both operating and capital needs.
This new approach will result in a substantial increase to Toronto Community Housing’s overall funding. The calculated 2020 subsidy under the new approved funding model is $410.96 million ($250.96 million for operating and $160 million for capital). When excluding the one-time provincial Social Housing Apartment Improvement Program funding ($133.111 million), this represents an increase of $132.741 million or 47.7 per cent over the 2019 subsidy. City staff will review the funding model at set intervals to ensure that the level of funding remains adequate over time.
Based on extensive research and analysis conducted by City and TCHC staff as well as an independent consultant’s review of different social housing funding models, staff recommended a rent supplement-based model to be implemented starting in 2020. A rent supplement-based model is designed to bridge the gap between what a tenant can afford to pay and the actual cost of housing.
The funding model approved today uses 75 per cent of average market rent (AMR) to establish the baseline revenue requirement. Effectively, this means TCHC will receive 75 per cent of AMR per housing unit – paid through a combination of rent from tenants and government subsidy.
The new model will be easy to administer, allows for inflationary increases and can easily be applied to different segments of Toronto Community Housing’s original portfolio should they transition to other service providers. The operating subsidy will be funded largely through the City’s tax base. The capital subsidy will be debt funded and serviced by the City.
Average market rent (AMR) is determined through an annual survey by the Canada Mortgage and Housing Corporation, which looks at all purpose-built rental units, including those that have been occupied by the same tenant for many years as well as units that are vacant or recently turned over. AMR therefore is more affordable (as much as 40 per cent less) compared to current asking market rental rates. The AMR in 2019 is $1,270 for a one-bedroom apartment and $1,492 for a two-bedroom apartment.
Quotes:
“Every home needs a strong foundation – the approval of this funding plan puts all the homes in the Toronto Community Housing portfolio on a stronger foundation. This will ensure TCHC has consistent, predictable funding year to year that will help improve the quality of housing and ultimately the quality of life for all tenants.”
– Mayor John Tory
“The City welcomes the significant federal contribution through the National Housing Strategy, as Toronto Community Housing addresses its capital repair backlog. It is important that we work with other orders of government so that Toronto Community Housing can continue to provide housing to more than 100,000 low-income Torontonians.”
– Deputy Mayor Ana Bailão, (Ward 9 Davenport), Chair of Planning and Housing Committee
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